Motor Vehicle Accident Victims Fight to Hold GM Accountable
The GM bankruptcy is affecting accident victims. On June 1, 2009, GM filed for Chapter 11 Bankruptcy protection, which will allow the company to re-organize, and sell it's assets to a new company. The Judge overseeing the bankruptcy approved the plan, but it may leave motor vehicle accident victims in the cold.
When any person or company files for bankruptcy, it sometimes results in a complete "discharge" of any claims, which includes claims from banks, vendors, and in this case, accident victims. This means that company or person filing bankruptcy is no longer required to pay a creditor, which could be an injured party. In some cases, where the company or person seeking bankruptcy protection reorganizes, the claims still exist, but may be severely discounted, resulting in payments for pennies on the dollar.
This is a unique case in many ways. Well, for one, it's GM. Second, the federal government is a big stake holder. Under this plan, GM is selling many of its assets to a new company. Any person with a claim that they were injured due to a defective GM product will not have a claim against the new company, but from the company that is left behind, or the "old" GM. The problem is that the old GM may not have sufficient assets to pay these claims, leaving these accident victims at risk of little or no compensation whatsoever.
This right to compensation is not automatic. These motor vehicle accident victims must prove that GM defectively designed or manufactured the particular product, and that defect caused the victim injury. This is no small task. However, if a victim were to prevail in court, it may be for naught. An appeal is in the works to object this part of the plan.
Anyone injured in a motor vehicle wreck because of another's negligence usually does not face this issue. If the negligent driver is insured, and files bankruptcy, the case will proceed, because the assets or judgment that pays the motor vehicle accident victim usually comes from the negligent person's insurance policy, not assets.
