New GM, Chrysler Not Liable for Old Injury Claims

Having gone through bankruptcy proceedings that ended in June of this year, Chrysler and GM are both considered “new” companies. In order to emerge from bankruptcy and restructure their companies while remaining financially viable, the new GM and Chrysler have been allowed to shed many financial liabilities, including “old” accident claims.

Victims of accidents involving GM and Chrysler vehicles who filed claims against either company will have great difficulty proceeding with their cases. There are reportedly hundreds of personal injury claims against both companies that were filed before the bankruptcies.

Some of the victims include those who have actually already won their suits and have been awarded monetary damages. The family of Vickie Mohr, who was killed in an accident involving her 2000 Dodge Caravan, won a liability suit against Chrysler and was awarded $52 million by a Tennessee court after her van was proven defective. The amount was lowered to $13 in appeals court, but the “new” Chrysler may be able to simply walk away from the liability.

Handling personal injury claims is complicated in bankruptcy situations; lawsuits are all halted against companies filing Chapter 11, but sometimes judges rule that only cases involving insurance may proceed. The process to sort out all the claims and decide who gets in line along with all the creditors and who may proceed is a complicated one that varies with each situation.

Chrysler and GM claim that being held liable for old claims would have destroyed their businesses and forced liquidation, which would have caused widespread financial hardship.

This, of course, does not help the victims of accidents or their families, who may be dealing with the horrors of unpaid medical and household expenses as well as the possibility of their own, personal bankruptcies.

After receiving pressure from several state attorneys general, the “new” Chrysler and GM agreed to honor Lemon Law claims made before their respective bankruptcies.

The New General Motors has also agreed to accept liability for future accidents involving cars produced before their bankruptcy proceedings. Chrysler, however, has made no such concession.

Posted in In the News

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