GM to return to bankruptcy court over ignition lawsuits

|By:, SA News Editor

GM (GM) is due in court today for a procedural conference where the company will try to persuade a judge to enforce a ban on it being sued for claims related to incidents prior to its exit from bankruptcy in 2009.

The conference comes as GM faces dozens of lawsuits over crashes linked to the defect in ignition switches in certain models. Plaintiffs argue that GM fraudulently hid its knowledge of the defect, so it can't be be protected from liability.

GM's attempt to head off the lawsuits is a gamble, says bankruptcy legal specialist David Skeel, as it could turn into a mini-trial over whether or nor the car-maker committed fraud.

Either way, the outcome could have wider implications for the business sector and could even end up in the Supreme Court, assuming that the losing side appeals any decisions made.