General Motors Co is trying to escape their past so much, that it has resorted to asking bankruptcy and several courts in the US to stall the 37 lawsuits filed against the company for the accidents that were caused by an ignition defect in the automaker's small cars, The Christian Science Monitor said.
GM has issued a global recall of around 3 million small cars, including Chevrolet Cobalt, Saturn Ion and small car models from the 2003-2011 years. The automaker said that the recall was issued due to a faulty ignition switch, and that the defect was found to have links to at least 13 deaths.
The Detroit-based GM will be seeking relief next week from a federal bankruptcy judge to determine whether if the lawsuits filed against it violate the terms of the company's Chapter 11 bankruptcy in July 2009, CS Monitor said. GM argued that since the company technically emerged as a new corporation, claims dated before their bankruptcy filing are linked to the "old" GM, which now goes under the entity name Motors Liquidation Co.
One company motion filed in Texas read, "Just like the other ‘ignition switch actions' that other plaintiffs have filed in the wake of public reports regarding the outstanding recall, this case relates to a vehicle designed, manufactured, originally sold and advertised by Old GM."
Detroit-based bankruptcy attorney Douglas Bernstein said that court judges might need to determine whether GM was aware of the defect ahead of the bankruptcy filing before deciding on whether the new GM should take responsibility. He added, "The overall philosophy of relief under the bankruptcy code is to give an honest debtor a fresh start. So the price of admission is full disclosure. You can't pick and choose. You have to disclose, it's mandatory that you bare all so there are no surprises."
