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Chrysler to expand product liability claims after all

Chris Shunk — Fri, 28 Aug 2009 10:31:00 EST

When Chrysler sought bankruptcy protection on April 30, the Obama administration insisted that one of the conditions of its Chapter 11 filing were that all product lawsuits against the Pentastar were the responsibility of "Old Carco LLC." In other words, anyone in litigation with Chrysler as a result of injuries that may have been caused as a result of faulty product would never be paid. The move was obviously unpopular with anyone seeking to sue Chrysler, and it wasn't exactly a public relations boon, either. Some groups were even looking to have product liability disclaimers added to all used Chrysler vehicles on dealer lots.

After taking a closer look at the viability of the new Chrysler Group, the reinvigorated automaker has decided to once again accept legal responsibility for vehicles purchased prior to June, 2009. Chrysler states in a press release (available after the jump) that it is taking a similar stance to how General Motors handled their lawsuits. If that is indeed the case, Chrysler would only take responsibility for future liability claims for cars and trucks assembled prior to bankruptcy - all cases that were in the courts prior to bankruptcy would still be the responsibility of Old Carco. The press release is rather vague and a bit confusing, but you can check it out after the jump.

[Source: Chrysler | Image: Bill Pugliano/Getty]

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Chrysler to expand product liability claims after all originally appeared on Autoblog on Fri, 28 Aug 2009 10:31:00 EST. Please see our terms for use of feeds.

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Consumer groups reportedly asking for liability warning labels on used Chryslers

Chris Shunk — Wed, 08 Jul 2009 11:30:00 EST

Filed under: Car Buying, Government/Legal, Chrysler, GM, Carsumer Advocacy

When Chrysler was in Chapter 11, the U.S. bankruptcy court decided that the new Pentastar would be free of any liability for accidents that involve Chrysler-branded products sold prior the bankruptcy. Automotive News is reporting that five consumer groups are looking to get the word out that used Chrysler products will not be eligible for such liability claims by putting a warning sticker on each and every used Dodge, Chrysler, and Jeep that is for sale.

The Federal Trade Commission is reviewing the petition, which states that consumers who purchase a used Chrysler vehicle risk "being held responsible for millions of dollars in medical expenses, hundreds of thousands of dollars in lost income and other losses - with no possibility of recompense - even if their injury was clearly Chrysler's fault." Under the current plan, customers looking to sue Chrysler for defective product concerns will have to go after old Chrysler, which is broke, bankrupt, and doomed.

Chrysler, of course, is against the petition, as the warning may harm a dealer's ability to sell used Chrysler-branded products. In an email to Automotive News, Chrysler spokesman Michael Palese wrote "In Chrysler's bankruptcy, the ability to form a new company free from the product liability burden of the old company was essential to the new company's survival." Palese also mentions that the petition has also uncovered no new defects or safety issues.

Automotive News is also reporting that General Motors has worked out a deal with state attorneys general to consider claims as long as they were submitted after the automaker's bankruptcy.

[Source: Automotive News - subs req'd | Image: Robyn Beck/AFP/Getty]

Consumer groups reportedly asking for liability warning labels on used Chryslers originally appeared on Autoblog on Wed, 08 Jul 2009 11:30:00 EST. Please see our terms for use of feeds.

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New GM will take on future product liability claims, but not the current ones, against Old GM

Jonathon Ramsey — Sun, 28 Jun 2009 14:11:00 EST

Filed under: Government/Legal, GM

A consumer group representing people who currently have product liability claims against GM and Chrysler looks like it won't be getting much, if any, restitution. When GM went into bankruptcy, it still planned to deny any liability claims -- ones that came up today, for instance -- when the new GM was formed. In a reversal meant to quell resistance from that consumer groups and state officials, New GM has agreed to assume liability for future claims on products made by Old GM.

The consumer group said, "The fact that 'New GM' will protect consumers injured by defective 'Old GM' cars is a positive development for public safety." The key word in this is "future;" new GM won't be responsible for any of the currently pending claims -- those that the consumer group is really fighting over, and that will still be addressed by old GM. Also, no date was given for when the "future" begins, so there is still a fair bit of clarity left to get on this issue.

[Source: Yahoo!]

New GM will take on future product liability claims, but not the current ones, against Old GM originally appeared on Autoblog on Sun, 28 Jun 2009 14:11:00 EST. Please see our terms for use of feeds.

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Bankruptcy filing reportedly allows GM, Chrysler to shed hundreds of product liability lawsuits

Chris Shunk — Mon, 22 Jun 2009 14:27:00 EST

Filed under: Government/Legal, Chrysler, GM

Outside of bankruptcy, General Motors and Chrysler were no longer competitive enough to remain solvent. After Chapter 11 reorganization, the two automakers will have a clean financial statement and a whole lot fewer employees, plants, and dealers. Another area where the two automakers will receive a clean bill of health is product liability lawsuits, and the savings will be huge, The Detroit News reports. GM, for example, had $928 million in liability expenses (including court costs and lawyer fees) in 2008 and $1.1 billion in 2007.

The government has ruled that the new GM and Chrysler will not be held liable for vehicles sold by the old GM and Chrysler. Lawyers are still debating whether or not cars and trucks purchased after bankruptcy proceedings began will be covered, but anything before bankruptcy is apparently out of the picture. University of Michigan law professor and bankruptcy scholar John Pottow told the DetNews that GM lawyers gave him the impression that it was the government that was driving this issue:

"What's fascinating about this is that it is the government taking the hard line here, insisting that the new company should emerge free of those liabilities. It's the government actually thinking like hardheaded investors instead of taking the more predictable, more socialist line."

While the two companies' ledgers will look better without the threat of liability, the move is brutal for those who are awaiting trial or have already been awarded money but have yet to receive any funds. Those who have been permanently disabled as a result of alleged vehicle defects will now likely never receive a dime for their injuries. While pre-bankruptcy liabilities will be swept under the rug, GM and Chrysler will continue to cover all applicable warranties both pre- and post-bankruptcy.

In the meantime, attorneys general from a number of states aren't taking the matter lying down - eight separate states have filed objections to the provision in federal bankruptcy court on Friday.

[Source: The Detroit News]

Bankruptcy filing reportedly allows GM, Chrysler to shed hundreds of product liability lawsuits originally appeared on Autoblog on Mon, 22 Jun 2009 14:27:00 EST. Please see our terms for use of feeds.

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