According to The Wall Street Journal, Chrysler's post-bailout restructuring allowed it to effectively erase any responsibility for car accident victims. Two years after the $12.5-billion auto industry bailouts, families like the one Vicki Denton left behind are stuck between a rock and a hard place.

The WSJ reports that Ms. Denton was killed in a head-on collision in which the airbag in her 1998 Dodge Caravan failed to deploy. A court ordered Chrysler to pay Denton's son and surviving relatives $2.2 million in damages, but that was just before the bailout hit. Since Chrysler is no longer under any obligation to the family because the bailout measures absolved Chrysler from its liabilities, the Dentons will almost certainly never see their money and have no legal recourse to get it.

The Chrysler case isn't unique. The same rings true at General Motors, where a $50-billion bailout and restructuring left asbestos victims, laid off dealers and accident victims without any way to secure their damages. Beyond the unfairness of the deal, some experts suggest paying accident victims wouldn't have been out of the question.

Those who coordinated the bailouts maintain that in situations like the ones at GM and Chrysler, full recompense simply isn't possible for everyone. As far as the courts are concerned, there is standing legal precedent to allow for such omissions during a bankruptcy restructuring.


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  • 30 Comments
      Mike
      • 3 Years Ago
      I suppose the best the families could hope for is to get their story out so that the car companies (Chrysler & GM) that received these bailouts could get some negative press. God luck to them.
      Carnut0913
      • 3 Years Ago
      Lets be honest. The only group the bankruptcies helped were the unions. If these had not been walked through by the administration, these would have been normal bankruptcies where the secured creditors were paid first and everyone else would have followed, and all contracts (union et al) would have been null and void. Since the government walked it through, secured creditors were thrown to the wolves, unions kept their contracts, and gained power within the companies. Is it any wonder these families were screwed?
        2 Wheeled Menace
        • 3 Years Ago
        @Carnut0913
        No.. they saved American manufacturing, which is an endangered species these days. I do not like this side effect either, however.
          Evan McMiller
          • 3 Years Ago
          @2 Wheeled Menace
          Uhh...no. Who cares....so what if stuff isn't made here. We suck at it anyway. This whole "we need manufacturing because we always have had it" mentality is just laughable and ridiculous in every way. All this bailout did was enable the continuation of poor business practices, which mostly consist of union pandering.
          LUSTSTANG S-197
          • 3 Years Ago
          @2 Wheeled Menace
          Okay Evan, tell that to the people of Michigan, whose economy basically revolves around the auto industry. See where that gets you. Letting the auto industry just die would have turned that state into a 3rd world country and waste land and would have had a devastating effect on our nation's economy as a whole. The rest of your comment doesn't even deserve a response.
        LUSTSTANG S-197
        • 3 Years Ago
        @Carnut0913
        The unions unfortunately benefited, but on a positive note, so did hundreds of thousands of workers around the country. The whole thing was bittersweet.
      airchompers
      • 3 Years Ago
      And where's that moral high-road that "buy domestic" idiots try to appeal to?
        LUSTSTANG S-197
        • 3 Years Ago
        @airchompers
        Contributing to the US economy, and helping many American workers remain employed by buying from American companies, as opposed to foreign ones is the moral. You cannot hold this against GM and Chrysler as all they did is simply agree to the terms of the bailout. Blame the government if you are looking for a scapegoat. There's really no one here to blame as it was a tough situation in which tough choices had to be made to keep our auto industry afloat.
      • 3 Years Ago
      [blocked]
        LUSTSTANG S-197
        • 3 Years Ago
        "And happy union workers equals votes for the Democrats!" Seeing how the UAWs membership has dwindled from 1.5 million in 1979 to just 390,000 in 2010, it does not have the presence that it once did. It's also helped make a lot of former Democrats Republicans. Despite the Obama administration's best efforts, the UAW is dying. Watching them try to prop this dying organization up is almost like watching "Weekend at Bernie's".
      • 3 Years Ago
      [blocked]
        nardvark
        • 3 Years Ago
        I also read the article today (at my kitchen table, with a cup of coffee, oh how I love it when I get to take a day off!) One thing that Autoblog did not mention from the article was that the airbag light was illuminated when she was killed. So the car was telling her that her airbag system was not functioning, she was in an accident, died when the airbag went off, and somehow this is Chrysler's fault? There's a reason those lights exist. Don't screw around with your safety systems, get them fixed.
        • 3 Years Ago
        [blocked]
      • 3 Years Ago
      [blocked]
        Greg
        • 3 Years Ago
        Someone losing their life to an airbag not deploying in a head-on collision seems like a valid reason for damages to be awarded.
      sirjaysmith
      • 3 Years Ago
      **** happens, life sucks, get over it and move on.
        Susan
        • 3 Years Ago
        @sirjaysmith
        Wow, you really got your quota of empathy for your fellow man when you were born.
      Polly Prissy Pants
      • 3 Years Ago
      So when your average Joe files for bankruptcy certain things like student loans are not forgiven, but when a supercorp files for bankruptcy they're magically off the hook for everything, including killing and maiming people? Guess it's pretty obvious who our legislators work for.
      rgee01
      • 3 Years Ago
      Regular people could never leave their tax and moral obligations behind... but big business and big unions in corporatist America can? You bet!
      1guyin10
      • 3 Years Ago
      The current GM and Chrysler are not the same legal entities that the judgements were rendered against. From a legal standpoint, asking the new GM or the new Chrysler group to pay these judgements would be like you buying a foreclosed home and the previous owner's bank coming after you for the money they lost. I know how these people feel, but there are a very large number of people who also lost out during the bankruptcy proceedings. More than a few retirees lost their entire savings in that deal.
      brian
      • 3 Years Ago
      This is what happens in all corporate Bankruptcies of this type - The only difference is that there are surviving entities here which are trading under the names of the old corporations and employ many of the same people. Had the Government not bailed them out, GM and Chrysler would be non-existant today - and these lawsuit winning folks would still have nothing.
        • 3 Years Ago
        @brian
        [blocked]
          Brian E Parker
          • 3 Years Ago
          Incorrect. There's a system and heirarchy of debt - The first folks to get paid would be those with Secured debt, such as holders of Corporate Bonds, then Preferred Stock holders. Lawsuit wins are unsecured debt - and they're low on the totem pole as other unsecured debt such as suppliers and employees would get paid before them. By the time they get down the list to unsecured debt holders - there's nothing left.
      Rick C.
      • 3 Years Ago
      This just isn't right on many levels. How can be call ourselves civilized if we can't see to the needs of those obviously wronged and allow the perpetrators to get away unscathed on some legal, business-based fine print?
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