GM must defend ignition-switch suits affecting used cars

A federal appeals court upended General Motors Co.s plan to shed hundreds of customer lawsuits over ignition switch defects.

By Erik Larson | Updated on July 13, 2016

(Bloomberg) – A federal appeals court upended General Motors Co.’s plan to shed hundreds of customer lawsuits over ignition switch defects, ruling that such litigation was not automatically barred by the company’s 2009 bankruptcy sale to a new corporate entity.

The deal that turned “Old GM” into “New GM” to save the storied company from financial ruin doesn’t prevent pre-sale lawsuits over the deadly switch or claims by people who bought used GM cars, the appeals court in Manhattan said Wednesday. Those customers didn’t have a chance to challenge the transaction before it was approved by the U.S. Bankruptcy Court in New York seven years ago, the court said.

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