General Motors on Tuesday asked the United States Supreme Court to reverse an appellate court’s judgement that the car manufacturer’s 2009 bankruptcy does not shield it from lawsuits over a defective ignition switch connected to 124 deaths and 275 injuries.
The petition marked a desperate effort by GM to obstruct hundreds of customer lawsuits over malfunctioning ignition switches, and other vehicles components, on grounds that they were disallowed by the car manufacturer’s 2009 bankruptcy sale to a new corporate entity.
In its petition, GM stated the bankruptcy code allows a buyer, in this case a recently formed business, to obtain a debtor’s rapidly weakening assets and be “free and clear” of its liabilities.
General Motors stated that if the July 2016 judgement by the 2nd U.S. Circuit Court of Appeals in New York was left standing, it would undermine an essential part of its business rescue and make future such deals harder.
“Simply put, this case presents exceptionally essential concerns, and the Second Circuit’s responses were exceptionally incorrect,” GM’s lawyers said in the petition. “The Court should grant review.”
The case related to an ignition switch that might slip out of place, triggering engines to stall and cutting power to the brake, steering and air bag systems. The problem prompted General Motors to start recalling 2.6 million automobiles in 2014.
General Motors has already paid roughly $2 billion in criminal and civil penalties and settlements with regards to the switch. The automaker previously acknowledged that some of its employees knew about the switch defect for few years before a recall was started.
