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Hurt in a Crash with a Recalled GM Vehicle? You May Be Entitled to Damages Even if It Was Long Ago

Wednesday, February 15, 2017By Richard Alexander

Do you think a company should get out of paying people hurt by its products just because the company receives a bankruptcy discharge? The truth is that the American bankruptcy system allows that to happen every day. Of course, there are exceptions to this rule, particularly when the company fails to disclose potential liabilities of which it was aware. This recently happened to GM.

GM has found itself in hot water more than once in recent years. To help alleviate its financial burden, it filed for bankruptcy in June 2009. It also asked for the bankruptcy court’s approval of a sale of the company from “Old GM” to “New GM.” The bankruptcy judge approved the sale.

In any bankruptcy proceeding, the debtor (the person or company asking for bankruptcy) has to disclose known or suspected liabilities. People or companies that hold a claim against the debtor have rights to come into court, be heard, and take part in a process that divides the debtor’s assets.

The foundation for all of this is that the debtor makes a full and fair disclosure of debts and liabilities.

Disclosures trigger notice to those who hold claims against the debtor. Each creditor actually receives a formal notice of the bankruptcy filing. If a debt or expected debt is not disclosed, no notice occurs.

New GM specifically assumed some of the liabilities of Old GM. However, it did not disclose the defective ignition switches that can shut themselves off, robbing the driver of power steering, power brakes, and proper airbag deployment.

For years, legal claims that arose before Old GM’s bankruptcy and sale have been denied or kicked out of court based on New GM’s bankruptcy protection. But now, all of that has been tossed out the window by a federal appellate court.

Here’s the bottom line: Because Old GM did not disclose ignition switch issues it knew about, it can’t claim bankruptcy protection for crashes that occurred before the sale. This is a big deal.

This means that if you or someone you love was involved in a crash due to a defective GM ignition switch, even if the crash occurred years ago, you may be able to bring a lawsuit for money damages against GM. You can check the affected vehicles list here. But don’t delay: This window will not be open long.

The attorneys at the Alexander Law Group, LLP represent people who have been badly injured in accidents, including victims of crashes involving defective GM ignition switches. If you need legal help with a bad accident case, contact the attorneys at Alexander Law Group, LLP at 888.777.1776 for a free case consultation. Companies who irresponsibly harm others should be held accountable for their actions.

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