US Department of Justice probes GM glitch link to bankruptcy filing

Article by Christian A., on March 24, 2014

The United States Department of Justice is investigating whether General Motors concealed an ignition switch glitch when it filed for bankruptcy in 2009, according to a report by The New York Times. The investigation includes a probe of whether GM committed bankruptcy fraud by failing to disclose the ignition issue, a person briefed on the inquiry told the Times.

Authorities also are probing whether GM understated the problem to federal safety regulators. The ignition switch issue has caused GM to issue a recall of 1.6 million vehicles in February. GM has already turned over related documents to federal investigators in New York, the source told The Times. GM spokesman Greg Martin told Reuters in an e-mail that the automaker cannot comment on the Justice Department probe.

"We are cooperating fully with authorities on several fronts and we will continue to do so," he said. The investigation is being conducted by FBI agents and federal prosecutors who worked on the fraud case against Toyota resulted to a $1.2 billion settlement last week, The Times said. A lawsuit was recently filed against GM arguing that the US carmaker be held liable for allegedly concealing ignition issue before its 2009 bankruptcy.

The current GM is a different legal entity than the one that filed for bankruptcy in 2009. Under the terms of its bankruptcy exit, the current GM could not be held liable for legal claims relating to incidents that occurred before July 2009. Any legal claims before July 2009 must be brought against the remnants of the "old" GM.

The proposed class action filed in federal court in California, however, argues that plaintiffs should be allowed to file claims over the pre-bankruptcy actions "because of the active concealment by Old GM and GM." The lawsuit said GM was responsible for reporting to the federal government any safety-related issues prior to its bankruptcy. [source: Reuters]

Topics: gm, ignition switch

If you liked the article, share on:

Comments

Recommended

An RHD (right hand drive) BMW M4 DTM Champion Edition has been listed to be for sale by Romans International, UK’s leading supercar dealership. The first owner of this rare...
by - May 24, 2017
Audi will be offering something exciting for its United Kingdom market. The company announced that it will be adding new features as standard to the A4 range. It also confirmed...
by - May 24, 2017
You guys are probably aware of the collaboration between Mercedes-Benz and Renault-Nissan. Knowing this, you would expect that both companies will come up with something impressive. Sources say that the...
by - May 24, 2017
Amongst all sports cars on the planet, which one is the world’s best-selling model? Would you have guessed that it is the Ford Mustang? According to IHS Markit’s global automotive...
by - May 24, 2017
It’s not a bird. It’s not a plane. It’s Kris Singh’s blue carbon flying machine! Time stood still for a few minutes after the extremely rare Pagani Huayra BC Macchina...
by - May 24, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries