— General Motors and its deadly ignition switches shouldn't be the target of lawsuits for any actions that took place before 2009 government bailout and bankruptcy, at least according to what attorneys for the automaker told the U.S. Supreme Court.
In a bid to overturn a lower court ruling that allowed certain claims to proceed based on GM's conduct prior to 2009, GM petitioned the Supreme Court to block lawsuits based on claims related to pre-bankrupt GM.
The case is the latest drama stemming from GM's faulty ignition switches that killed and injured hundreds of people. With billions of dollars at stake and lawsuits popping up everywhere, General Motors won big when in April 2015, a federal judge ruled a bankruptcy agreement with the government gave GM immunity for its actions prior to July 2009.
However, although Judge Robert Gerber said the law is on the side of GM, the judge also ruled many people at "Old GM" knew about the ignition switch defects but chose to conceal the problems from the public and government authorities. Judge Gerber also said GM should have recalled the cars long ago, but instead the company ignored the dangers.
While the automaker believed the issue had been put to bed, a ruling in July 2016 from the U.S. Second Circuit Court of Appeals woke things up when the court ruled General Motors had to face certain pre-bankrupt claims.
Affected GM owners argued the automaker must have known about the defective ignition switches long before bankruptcy and the court agreed.
The appeals court ruled the bankruptcy agreement didn't block owners from filing lawsuits over a loss of vehicle values and certain types of personal injury and wrongful death claims, a ruling that caused GM to take its case to the Supreme Court.
In the petition, the automaker says the appeals court went against established law by ruling GM can be held accountable for actions prior to July 2009. GM says by leaving the appeals court decision as it stands, all future business transactions involving bankrupt companies will be at risk.
The automaker says creditors will be affected concerning selling assets during bankruptcy proceedings if bankruptcy agreements aren't taken at face value. GM also argues the appeals court decision leaves the "New GM" at the mercy of decisions made by "Old GM."
Consumers say the bankruptcy agreement should have never been approved by the court because GM committed fraud by keeping its mouth shut about known ignition switch defects. The proof of that can be seen in a report from an outside investigator who determined the "New GM" carried on the behavior of "Old GM."