A federal judge early this week ruled that GM (General Motors Co.) can hold on to its bankruptcy protection, which allows it to halt legal claims worth billions of dollars from consumers seeking damages over a faulty ignition switch.
Robert Gerber, a U.S. bankruptcy judge, who heard the oral arguments, submitted a 134-page ruling indicating that he couldn’t find evidence where GM carried out fraudulent acts in court when it participated in the bankruptcy process. The protection curbs customers from filing suit for compensation for injuries sustained and declining resale values to older GM vehicle models equipped with faulty ignition switches.
Attorneys of the plaintiffs argued that GM mislead the court for not revealing the faulty ignition switch matter, which it had knowledge of back in 2005. GM said its executives weren’t informed of the issue until 2013, which pushed for a 2.6-million vehicle recall a year later. The ignition switch problem has now been linked to over 80 deaths and more than 100 injuries.