US: bankruptcy judge says GM committed fraud if it purposely hid the switch defect

US Bankruptcy Judge Robert Gerber held a hearing in his New York court on whether plaintiffs seeking compensation over the lost value of their GM cars could go on with their cases.

General Motors, besides the lawsuits from victims and families victims seeking compensation in relation to the mishandling of the now famous ignition switch defect, also has to face numerous others legal actions from owners who claimed they lost their cars value. One such case has the plaintiffs’ lawyer seek as much as $10 billion from GM.

So, the stakes are high, as the US automaker has moved to ask the same Judge that guided the company through its 2009 bankruptcy process to enforce a ban on legal actions seeking damage from the “new" GM.

Gerber said that if GM’s then Chief Executive Officer Fritz Henderson "knew about the switch problem and intended to keep it from me, that might constitute fraud on the court."

The legal offense implied would be more serious than the one evoked by plaintiffs lawyers, which hinged on a technicality – GM did not give its customers the chance to say anything on the matter back in 2009, as they were not let know on the failure.

Gerber did say that the lawyers would need to somehow prove the executives knew about the defect to prove they defrauded the court back in 2009 when they testified – as the Judge needs to assert whether to let around 90 cases against GM proceed or bar them by enforcing the so called bankruptcy “shield" evoked by the automaker.

Leave a Reply