Federal authorities are investigating whether GM committed bankruptcy fraud by concealing its ignition switch defect when it filed for bankruptcy back in 2009. The ignition switch problems led to the recall of 1.6 million vehicles last month.
GM is a different legal entity than the one that filed for bankruptcy in 2009. The “new” GM is not responsible under the terms of its bankruptcy exit for legal claims relating to incidents that took place before July 2009. Those claims must be brought against the “old” pre-bankruptcy GM.
The class action lawsuit said plaintiffs should be allowed to sue over the pre-bankruptcy actions “because of the active concealment by the Old GM and GM.” The lawsuit has also said that GM is responsible for reporting to the federal government any safety-related problems for cars made before its bankruptcy.
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