From AAIA Capital Report
Eight state attorneys general have filed an objection with the U.S. Bankruptcy Court in New York, regarding the elimination of successor liability from the terms of the General Motors (GM) bankruptcy. The complaint argues that the court overstepped its authority by eliminating past tort liability for Chrysler and is protesting a similar request by General Motors as part of its bankruptcy filing.
The attorneys general have called out this provision as an evisceration of states’ rights stating that "these offensive provisions, taken as a whole, divest consumers of substantial legal rights, without any regard for state laws that may, when a claim is eventually made, be read to hold otherwise." A copy of the complaint filed by attorneys general from Connecticut, Kentucky, Maryland, Minnesota, Missouri, Nebraska, North Dakota and Vermont can be found by visiting www.safetyresearch.net/Library/CT_Objection_20090619.pdf.
According to a study released by the research firm Safety Research & Strategies, about 3,400 individuals will die or be injured in a General Motors or Chrysler vehicle due to an automotive defect in the companies’ products first year post-bankruptcy. Entitled "Public Safety at Risk: Bankruptcies Leave Legacy of Defects, Injuries and Deaths," the study found that the elimination of responsibility for past liability under the terms of the bankruptcy filings by both manufacturers will mean that hundreds of pending death and injury claims will be eliminated. Yet, the study finds, the automotive defects will continue to manifest themselves in the 40 million GM and Chrysler vehicles built before Chapter 11, which will remain in the U.S. fleet.
According to the study, the average combined casualties-per-year for both companies is 3,415. These claims can be expected to continue at the same pace resulting in approximately 3,400 new casualties each year during the next couple of years. The study points out that "if neither company is responsible for the past and future claims involving 40 million vehicles, few will file death or injury claims. If death and injury claims data do not reflect the status of real-world problems on the road, safety is compromised. And, if GM and Chrysler no longer bear the liability for uncorrected defects, the automaker has few motivations to fix the pre-bankruptcy problems."
A copy of the report can be found at www.safetyresearch.net/2009/06/23/why-the-problems-won%e2%80%99t-go-away-when-the-old-chrysler-and-gm-do.
