Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comKey Contacts
Back
General Motors Co. is returning to the same Manhattan bankruptcy court that granted it protection under Chapter 11 of the bankruptcy law in 2009 to face owners of recalled cars, according to Bloomberg Businessweek. The company faces 59 lawsuits by car owners, who are demanding a combined total of as much as $10 billion in damages. The lawsuits center around recalled cars with faulty ignition switches, which shut off the engines while the car is being driven in some circumstances, and prevent airbags from deploying.
In the 2009 ruling, U.S. Bankruptcy Judge Robert Gerber granted GM protection from a large number of liabilities by allowing it to split into “Old GM” and “New GM,” the news source explained. While the automaker accepted some liabilities into the new company, like those for warranty obligations and responsibility for post-2009 accidents that occur in pre-2009 cars, the majority of its liabilities stayed with the old GM. This means that new GM is not currently legally responsible for the loss of value on pre-2009 cars resulting from old GM’s alleged conduct.
Many legal experts believe that Judge Gerber is unlikely to undo a key part of the bankruptcy sale that he approved in 2009, but car owners may have a recourse, according to Reuters. With evidence emerging that at least some GM employees were aware of the problems with the ignition switches, the company is asking Gerber to make a clear ruling that it did not intentionally hide any knowledge from the bankruptcy court. Plaintiffs are arguing that GM hid knowledge of the defect, making a case for fraud.
Gerber has not been afraid to admonish GM in the past, Reuters noted. In a 2012 trial regarding the same bankruptcy, Gerber called revelations that the company disclose a payment of $367 million to certain hedge fund creditors “shocking.” Gerber’s decision in this high-profile case may set a precedent for further such bankruptcy filings.
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
How Can Trusts Be Used in Business Succession?
For many New Jersey business owners, a closely held company represents decades of work, financial investment, and personal sacrifice. Trusts in business succession planning are one of the most effective tools for protecting that value, allowing founders to control how and when the business passes to the next generation while reducing the risk of disputes, […]
Author: George McGowan
Read Before You Sign: IT Contract Pitfalls Every NJ Business Should Know
In today’s digital economy, New Jersey businesses of all sizes rely heavily on technology vendors, software providers, cloud platforms, and managed IT services. Whether your company is purchasing software, migrating data to the cloud, engaging a cybersecurity consultant, or entering into a long-term managed services agreement, a careful IT contract review can have significant operational, […]
Author: George McGowan
New York NDA Requirements for Businesses
Non-disclosure agreements (NDAs) remain a critical tool for protecting sensitive business information. However, New York NDA requirements have evolved, and businesses must ensure these agreements are carefully drafted to remain enforceable. In a competitive market like New York City, NDAs are commonly used to protect proprietary information, client relationships, and strategic plans. At the same […]
Author: Dan Brecher
New Jersey Will Contest Grounds Explained
How Courts Evaluate Testamentary Capacity and Undue Influence Will contests in New Jersey are difficult to win, given the strong presumption that a properly executed will reflects the testator’s intent. However, challenges based on lack of testamentary capacity and undue influence remain common, particularly where there are concerns about mental capacity or the involvement of […]
Author: Marc J. Comer
Legal Issues Before Bringing on Investors
Bringing on outside investors can provide the capital and strategic support a business needs to grow. However, raising capital also introduces important legal, financial, and operational considerations. Before bringing on investors, businesses should address key legal issues to reduce risk, streamline investor due diligence, and position the company for long-term success. Early preparation signals that […]
Author: Dan Brecher
SECURE 2.0 RMD Planning Strategies
How the Updated Law Shapes Retirement and Estate Planning The SECURE 2.0 Act of 2022 materially reshapes the required minimum distribution (RMD) landscape, extending tax deferral opportunities while accelerating distribution requirements for many beneficiaries. For high-net-worth individuals and families, these changes are not merely technical. They require a reassessment of retirement income strategies, beneficiary planning, […]
Author: Marc J. Comer
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.