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GM’s bankrupt predecessor tells carmaker to pay customers

General Motors Co. customers won a key ally in their quest for $10 billion in compensation: the automakers bankrupt predecessor, which said switch defects were illegally hidden from consumers during the companys 2009 bailout.

By Linda Sandler, Bloomberg | Updated on December 18, 2014
GM CEO Mary Barra
(Bloomberg) — General Motors Co. customers won a key ally in their quest for $10 billion in compensation: the automaker’s bankrupt predecessor, which said switch defects were illegally hidden from consumers during the company’s 2009 bailout.

A trust that pays the bankrupt company’s creditors urged a judge to set aside earlier rulings that told the now-profitable GM it needn’t pay customers for price drops of older, recalled vehicles. Drivers who were denied their rights in his court five years ago are entitled to sue now, it said in a Dec. 16 court filing.

The trust and its creditors counted more than 170 lawsuits mounted during 80 recalls of over 30 million cars, many with defective switches that GM “has been aware of, and concealed, for years.” The automaker has no legal ground for asking the judge to shield it from customers, they said.

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