Personal Injury Law

General Motors and Chrysler Assume Liability for Pre-Bankruptcy Vehicles

By Brett Emison

In a major victory for consumers, both General Motors and Chrysler have agreed to assume liability for all vehicles in accidents or collisions that occurred after their bankruptcies.

Under the original bankruptcy plans, both car makers rejected any liability stemming from their vehicles that were manufactured or sold before the companies entered bankruptcy. The original plan allowed both GM and Chrysler to sell off their "good" assets to the "New GM" and "New Chrysler" while leaving virtually nothing in the "Old" companies for consumers who were injured or killed by defective Chrysler or defective GM vehicles. Under the original plans Chrysler and GM would have repaired the defective vehicles under warranty claims, but if that same defect caused injury, the consumer would get nothing. The companies would have fixed the car, but not the people.

These original plans offered GM and Chrysler de facto immunity for all of the vehicles manufactured before entering bankruptcy. Estimates put 66 million GM vehicles and 33 million Chrysler vehicles on the road at the time of the bankruptcy filings, leaving 100 million ticking time bombs on the road. The original plan effectively shifted the auto companies' tort liability to not only GM and Chrysler customers, but anyone those customers injured in an accident or collision. Very wealthy victims would have been forced to use their own savings, while other victims would have been cared for by taxpayers through Medicaid or Medicare programs.

Langdon & Emison was involved in several organizations fighting for consumers throughout the bankruptcy process. Bob Langdon met with the governors of several states and explained that GM and Chrysler had shifted their liabiliyt for defective cars and trucks to tax payers and to state governments through the Medicaid program, which would be forced to care for injured victims. Kent Emison met personally with U.S. Senators and Representatives to prevent tax payers from subsidizing GM and Chrysler liability through the Medicare system. Their work -- along with the work of countless others -- finally put enough pressure on GM and Chrysler that each car company has finally agreed to accept responsibility for defective and dangerous vehicles designed and manufactured by the "old" car companies.

Unfortunately, consumers with accidents or collisions that occurred before the bankruptcies are left in a state of limbo. The car companies have refused to accept liability for these defects and the injuries they caused. Consumers with claims that arose before or during the bankruptcies continue to be left out. The car makers have made informal suggestions that suggest the consumers may someday be compensated, but this remains unclear.

Langdon & Emison is one of the leading automotive product liability law firms in the country with offices in Chicago, St. Louis and near Kansas City. We try cases across the country and represent seriously injured persons and the families of those killed by defective products or the negligence of others. In addition to auto products liability, our practice areas include general products liability, trucking accidents, railroad crossing accidents, mass tort claims, dangerous drugs and commercial litigation.

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Full post as published by Kansas City Personal Injury Lawyer on September 16, 2009 (boomark / email).