By Jeff Bennett
A federal judge ruled Wednesday General Motors Co. can keep its
bankruptcy shield, which allows it to block potentially billions of
dollars in legal claims by hundreds of customers seeking damages
over a defective ignition switch.
U.S. Bankruptcy Judge Robert Gerber, who heard arguments, handed
down a 134-page ruling saying he could find no instances where GM
had committed fraud upon the court when it was going through the
bankruptcy process. The shield prevents customers from suing for
compensation for declining resale values and injuries tied to older
GM compact cars that were equipped with the defective ignition
switch.
Plaintiffs attorneys had argued GM mislead the court by not
disclosing the faulty ignition-switch issue, which it knew about in
2005. GM has said its executive team was never informed of the
problem until late 2013, which lead to a recall of 2.6 million
vehicles in 2014. The ignition switch issue has now been linked to
84 deaths and 157 serious injuries.
"This ruling padlocks the courthouse doors," said Texas attorney
Bob Hilliard, one of the lawyers representing the plaintiffs.
"Hundreds of victims and their families will go to bed tonight
forever deprived of justice. GM, bathing in billions, may now turn
its back on the dead and injured, worry free."
A GM spokesman declined to immediately comment.
Write to Jeff Bennett at jeff.bennett@wsj.com
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