GM compensation fund makes cash offers to 15 people

Article by Andrew Christian, on September 28, 2014

The fund set up by General Motors intended for compensating victims of defective ignition switches on the carmaker’s compact cars has made its first cash offers to around 15 people, according to the office of Kenneth Feinberg, a lawyer in charge of the program

The program is offering to pay at least $1 million for each death claim or more if they had dependents. The fund has received 850 claims – including 150 deaths -- as of September 24, compared to 675 as of September 19. So far, around 21 death claims has been green-lighted for compensation. The fund’s deputy administrator, Camille Biros, disclosed that the cash offers were made verbally and included cases of death and injuries.

GM has allocated around $400 million to cover the compensation costs through the program, which will continue to accept applications until the end of 2014. The claims can be filed on behalf of individuals injured or killed in accidents tied to the faulty switch.

The ignition switch has a problem that could cause it to slip out of position, thereby stalling the vehicle and disabling air bags – leading to recalls of millions of cars by GM.

Feinberg told Reuters in an earlier interview that he could not say how many claims will being filed as well as how many would be eligible for payments. He quipped that some claims were submitted without enough documentation, thereby causing a delay in the determination of their eligibility.

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