Blumenthal objects to GM idea on defective vehicles

Chris Dickerson Jun. 19, 2009, 10:45pm


HARTFORD, Conn. (Legal Newsline) -- Connecticut Attorney General Richard Blumenthal wants a proposal regarding defective GM vehicles rejected.

In an objection filed Friday as part of the General Motors' bankruptcy proceeding, Blumenthal urged the court to reject a provision of a proposed purchase agreement that would free GM's new owner of any liability for defective vehicles bought prior to the closing of the sale.

If the court allows Vehicle Acquisition Holdings LLC (Newco) to buy GM's assets free and clear of product liability, countless GM consumers will be deprived of fair compensation, including anyone who has suffered life-altering injuries or death resulting from defective vehicles.

Attorneys general from other states who joined Blumenthal's motion include Kentucky, Maryland, Minnesota, Missouri and Nebraska.

"Newco wants to peel off into the sunset with GM's name and products -- but leave existing GM vehicle owners in the dust, unprotected and unable to seek compensation for defective vehicles that may cause serious injury or even death," Blumenthal said in a press release. "The bankruptcy court has a moral duty to require that Newco accept the accountability, as well as the assets.

"This proposed order would deprive GM consumers of key legal rights to compensation for death or serious injuries caused by defective GM products. Stripping consumer rights would be unfair and unconstitutional -- violating due process -- and also inconsistent with public assurances by the President of the United States that consumers can have confidence in GM vehicles.

"GM consumers -- like all vehicle owners -- may have cars or trucks with undiscovered defects. If owners of such defective vehicles suffer severe injury, they will be deprived of the same opportunity that all other consumers have to seek fair compensation.

In the motion, Blumenthal said, "To allow Newco to purchase substantially all of the Debtors' assets, continue in the manufacture and sale of GM vehicles, enjoy the good will that comes along with the purchase of the GM name and brand, and still avoid any claims brought against it on the theory of successor liability contrary to state law is an unconscionable result that will harm innocent consumers. Victims of future accidents who would otherwise be able to bring claims against Newco under the product-line successor liability theory may be, if this court enters the proposed order, forever barred from seeking redress.

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