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News and Information about bankruptcy and ignition switch

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GM execs could invoke bankruptcy terms to reduce recall liability

General Motors could potentially reduce its product liability relating to a recall of around 1.6 million vehicles caused by a faulty ignition if the carmaker would invoke the terms of its bankruptcy restructuring.  The terms of GM’s restructuring tell that the carmaker’s product liability extends only to accidents that happened after the reorganized company – the new GM – emerged from bankruptcy in July 2009.

Plaintiffs injured before July 2009 would have to seek redress from the defunct shell of GM – the old GM -- in Bankruptcy Court, where the chances of gaining compensation is slim.

GM's original restructuring plan would have rendered the carmaker immune to liability claims from all of its pre-bankruptcy cars, including the oldest models covered by the ignition switch recall, like the Chevrolet Cobalt, Pontiac G5 and Saturn Ion. But due to intense discussions with state attorneys general and consumer groups such as the Center for Auto Safety, GM changed the terms.

Read the entire article GM execs could invoke bankruptcy terms to reduce recall liability

Signs of a Failing Ignition Switch

Before you can drive your car, you have to insert the car key into the ignition switch and turn it accordingly. If the engine starts, you are now good to go. But if it won't start, it could be that the ignition switch is already failing.

The ignition switch is one of the electronic components that is frequently used and is also one of the most important. Because it is used frequently, the ignition switch would eventual wear out and show some problems. If it malfunctions or fails, there won't be any way to power on the electronics in the car or start its engine. Thus, knowing the signs of a failing ignition switch would be practical.

But before knowing these signs, being informed of how the ignition switch works would be of great use. Different systems in the car are powered depending on the position of the key on the ignition switch. There are four positions on the ignition switch: Lock (or Off), Acc (or Accesory), On (or Run) and Start.

Read the entire article Signs of a Failing Ignition Switch

AC Cars saves Zenos brand from extinction

British startup Zenos, which entered bankruptcy administration earlier this year is now back in business. The Norfolk-based sports car manufacturer was bought by a consortium of investors headed by AC Cars, another British brand. The consortium has acquired all of its assets including Zenos’ intellectual property, ten remaining cars assembled, as well as its Wymondham headquarters.

Zenos Cars was founded in 2012 by Ansar Ali and Mark Edwards ---both were formerly connected to two famous British automotive companies--Lotus and Caterham. The British automaker started out at Hethel Engineering Center with a small lineup of lightweight carbon-fiber sports cars including the Zenos E10. Using Ford EcoBoost for its engine, the Zenos E10 sports car is also made with an aluminum and composite chassis. Eventually, the company started experiencing financial setbacks due to high production cost.

AC Cars Limited meanwhile continues to manufacture the Cobra also known as the MkVI roadster or Shelby Cobra. Only recently, the British brand increased its lineup by building a right hand drive version of the iconic sports car.

Read the entire article AC Cars saves Zenos brand from extinction

British sports car startup Zenos Cars goes financially bust

Remember Zenos Cars, a British carmaker that specializes in designing and building lightweight and high-performance sports cars? If you are wondering how the company is faring with their E10 lightweight car, Zenos hasn’t been doing well and is, in fact, in dire financial straits. The severity of its financial problems has the company compelled to enter into administration, a process that is similar to bankruptcy protection.

According to a notice on the carmaker’s Web site, the company was placed under administration on January 16, 2017, with Irvin Milton Cohen and Gary Paul Shankland -- both of Begbies Traynor (London) LLP -- being appointed as Joint Administrators. Cohen and Shankland are now acting as Zenos agents without any personal liability. As Joint Administrators, Cohen and Shankland are now in charge of the management of the carmaker’s affairs, business and property.

Zenos’ humble beginnings can be traced to May 2012, when it was founded by Ansar Ali and Mark Edwards. Edwards and Ali were both employees at Lotus, and then at Caterham. However, Ali left Zenos in 2015 and joined the ranks at McLaren – although he remained a shareholder. According to his LinkedIn account, Ali is now the managing director for McLaren Special Operations (MSO) at McLaren Automotive. Edwards is currently Zenos’ chief executive, although his management powers are now gone.

Read the entire article British sports car startup Zenos Cars goes financially bust

General Motors will continue to be under the scrutiny of the National Highway Traffic Safety Administration for at least one more year after federal safety regulators decided to extend a consent order that allows the government to closely monitor its safety processes. Last year, GM issued a massive recall due to a defect in its ignition switch.

According to the consent order last year, GM agreed to being overseen by the government for up to three years, as the price it has to pay for delaying to recall 2.6 million small cars with defective ignition switches. This problem has been associated with almost 200 injuries and at least 104 fatalities.

On the anniversary of the initial consent order, the NHTSA announced that it will have oversight on how GM manages safety matters for one additional year at least. The reason it gave was that it has been “a productive and effective tool” to handle potential safety issues “proactively and expeditiously.”

Read the entire article Ignition switch recall: GM will continue to be supervised by NHTSA for at least 1 more year

Fiat Chrysler Automobiles will issue another recall of 703,000 minivans and SUVs with a faulty ignition switch that could rotate out of position. According to the United States National Highway Traffic Safety Administration, the recall covers MY2008-2010 Dodge Grand Caravan, Chrysler Town and Country and Dodge Journey, which faulty switches could make a vehicle stall, lose power and disable its airbags.

These vehicles were recalled in 2011 and 2014. FCA’s recall is similar to the ones that plagued General Motors in 2014, linked to 57 deaths in crashes and led to the recall of 2.59 million small cars. The delays in GM’s response to the defect have led to four congressional hearings and a $35 million fine. Those switches were supplied by Delphi.

NHTSA’s investigation into Chrysler vehicles commenced after the GM ignition-switch disclosures in 2014, when it contacted all major carmakers on whether vehicle stalls might affect airbag performance. In Chrysler’s case, it has determined that the airbags in the three affected models function for two-tenths of a second if the ignition switch moves to the accessory or off position.

Read the entire article FCA to recall again minivans and SUVs with faulty ignition switch

Judge Robert Gerber of the United States Bankruptcy Court in Manhattan remarked that if General Motors did violate car owners' constitutional rights by concealing ignition-switch defects during its bankruptcy, he may narrow the legal protections granted to the carmaker under its 2009 bankruptcy sale.

GM's 2009 bankruptcy led to a sale of its profitable assets to an entity that now known as General Motors Co., while its liabilities were assigned to the "Old GM" trust.

According to GM, the plaintiffs should seek compensation from the trust since their claims pertain to vehicles built before bankruptcy. The carmaker has already set up a program to compensate victims – either for those killed or injured -- due to faulty ignition switches.

Read the entire article Judge says GM could be faulted if car owner rights were violated

As of last week, the compensation program for victims of General Motors’ defective ignition switch had received a total of 4,237 claims: 462 for death, 282 for catastrophic injuries and 3,493 for less-serious injuries requiring hospitalization. While the last day for submission of claims to the compensation program was set on Jan. 31, 2015, claims postmarked by that date will be eligible for review.

For that week, GM received 57 more claims, according to a report from lawyer Kenneth Feinberg, who was tapped by GM to administer the program. So far, Feinberg has determined that 131 claims are eligible for compensation: 52 deaths, eight severe injuries and 71 other injuries, according to the report of the compensation program.

He also has determined 501 claims are ineligible and is still reviewing 1,143 claims. The report also showed that 1,016 claims submitted with the program lacked sufficient paperwork or evidence while 1,446 had no documentation at all.

Read the entire article GM compensation program for defective ignition switch gets 4,237 claims

The program set up to compensate victims of General Motors’ defective ignition switches have received a total of 4,180 claims for deaths and injuries since commencing in August 2014 and wrapping up on January 31, 2015. So far, the program, headed by lawyer Kenneth Feinberg, has determined to be eligible for compensation 51 deaths, eight catastrophic injuries and 69 less serious injuries.

According to fund deputy administrator Camille Biros, more death, catastrophic injuries and less serious injuries will be found eligible as the program continues to process claims received. Biros disclosed to Reuters that claims had been surging and January was the heaviest months for filing as over 1,600 claims were filed with the compensation program.

Likewise, the total number of claims could increase further as any claims not yet received with a time stamp from before the deadline would still be accepted. She said that processing of claims to determined who and who are not eligible for compensation will be done through the end of spring.

Read the entire article GM compensation program receives 4,180 claims until deadline

General Motors has declined a request from United States Sens. Richard Blumenthal, D-Conn., and Edward J. Markey, D-Mass to extend beyond January 31 the application for compensation for victims of its faulty ignition switch. GM said in a statement it has conducted extensive outreach and has contacted over five million former and present owners of the recalled cars.

GM said it does not plan another extension as its goal is to be “just and timely” in compensating the families of victims.

Senators Blumenthal and Markey told GM chief executive Mary Barra that victims of the faulty switches should be given more time to decide whether to file, citing two pending factors causing some of them victims to delay – 1) a Department of Justice probe into whether the carmaker breached any laws in handling the defect; and 2) a pending federal court decision on whether the company is shielded from liability by its 2009 bankruptcy.

Read the entire article GM won’t extend ignition-switch claims deadline despite calls from 2 senators

A Dutch appeals court has declared the bankruptcy of financially troubled Dutch supercar maker Spyker "null and void with retrospective effect." A local court placed the company in bankruptcy on Dec. 18 by a Dutch court after the bridging funds promised during creditor protection failed to materialize. Spyker only received the funds 11 days later and then filed an appeal on bankruptcy ruling.

The nullification of the bankruptcy declaration means that Spyker is now back under the protection of the "moratorium of payment," which is similar to the Chapter 11 protection in the United States.

With the matter resolved, Spyker chief executive Victor Muller said he plans to push ahead with development of the B6 Venator entry-level luxury sports car as well as merge with a US-based maker of high performance electric aircraft.

Read the entire article Dutch appeals court cancels bankruptcy of Spyker NV

As January 23, 2015, the compensation program for victims of defective ignition switches in vehicles of General Motors has confirmed 50 deaths from the 338 filed from August until that date. The number of confirmed deaths was four times GM’s estimate and may even go higher as the deadline for claims ends on Jan. 31.

According to a report by in charge of the program, lawyer Kenneth Feinberg, 67 death claims are under review while is working with 53 applicants who haven’t documented their requests. The rest of the claims failed to qualify with Feinberg’s standards. He said that his standard diffs from what GM used and explained the difference in findings.

He said that while GM engineers look for definitive proof of ignition switch failure, he only looks for circumstantial evidence of the cause of the accident. This means that his standards are more lax than GM and there will be a greater number of eligible death claims.

Read the entire article GM compensation programs confirms 50 deaths as of January 23

General Motors now has received 2,710 claims for compensation for deaths and injuries caused by faulty ignition switches in its cars.  According to the report from lawyer Kenneth Feinberg, who was administering the compensation program for GM, they received 141 new claims for compensation last week.

The compensation program is currently receiving claims on behalf of individuals injured or killed in accidents related to the faulty ignition switches. These defective parts could slip out of position, which could stall the vehicle and render its airbags not deployable.

Sorted out, the total claims refer to 303 for deaths, 202 for catastrophic injuries and 2,205 for less-serious injuries that required hospitalization. According to Feiberg’s report, the program has determined that 12 more claims were eligible for compensation to 112 from 100.

Read the entire article GM extends compensation program application deadline to January 31, 2015

General Motors now has received 2,710 claims for compensation for deaths and injuries caused by faulty ignition switches in its cars. The count was as of January 9, 2015. According to the report from lawyer Kenneth Feinberg, who was administering the compensation program for GM, they received 141 new claims for compensation last week.

The compensation program is currently receiving claims on behalf of individuals injured or killed in accidents related to the faulty ignition switches. These defective parts could slip out of position, which could stall the vehicle and render its airbags not deployable.

Sorted out, the total claims refer to 303 for deaths, 202 for catastrophic injuries and 2,205 for less-serious injuries that required hospitalization. According to Feiberg’s report, the program has determined that 12 more claims were eligible for compensation to 112 from 100.

Read the entire article GM compensation program had 2,710 claims as of January 9

The year 2014 marked a somewhat bad year for General Motors Co. as it was highlighted by recall crisis over a faulty ignition switch. That crisis, however, refused to die in 2015 as GM began the year issuing three new vehicle recalls, one of them covering 83,572 sport-utility vehicles and pickup trucks, this time involving an ignition lock actuator with an outer diameter exceeding specifications.

GM expects that less than 500 units have the defect. Unlike the ignition switch recall, the latest recall is not currently related to crashes or injuries. According to GM, the latest issue was discovered during an internal review after warranty party returns.

The latest recall covers MY2011 and MY2012: Chevrolet Silverado, Avalanche, Tahoe and Suburban; GMC Sierra and Yukon and Yukon XL; Cadillac Escalade, Escalade ESV and Escalade EXT. The ignition lock actuator recall also covers same nameplates from MY2007-2014 that have been repaired with defective parts.

Read the entire article General Motors recall almost 84,000 vehicles over 3 issues

A Dutch district court has declared Spyker NV bankrupt, placing the financially troubled supercar maker under court-supervised receivership. Also placed under receivership are Spyker’s wholly owned subsidiaries Spyker Automobielen and Spyker Events & Branding. The court-appointed administrator for Spyker is now tasked to guide the carmaker through bankruptcy proceedings, the Dutch company said in a statement.

The carmaker said that the court ruled to declare it bankruptcy after a planned bridge funding failed to reach it on time. Spyker founder and chief executive Victor Muller has vowed to revive the company and this time around, he said that his company’s bankruptcy “is not the end.”

He remarked that he will “relentlessly endeavor” to revive Spyker as soon as practically possible. He said that once Spyker is revived, it would merge with a high performance electric aircraft maker and develop electric vehicles with “disruptive sustainable technology.”

Read the entire article Dutch court sends Spyker NV into bankruptcy

Sixty-four more claims for compensation from a defective ignition switch in General Motors vehicles were filed last week, according to a report by lawyer Kenneth Feinberg, who heads the carmaker’s compensation program. As of December 12, 2014, GM’s compensation program had received a total of 2,326 claims for compensation -- 251 claims for deaths, 156 claims for catastrophic injuries and 1,919 for less-serious injuries requiring hospitalization -- bringing the total claims count to.

The program has determined that four more death claims were eligible for compensation, bringing the total to 42 deaths, seven severe injuries and 51 other injuries. Of the received claims, 306 claims had been determined as ineligible and 445 were under review.

Feinberg’s report also disclosed that 568 claims failed to submit sufficient paperwork or evidence while 907 documents had no documentation at all.

Read the entire article GM compensation program has now 4 more death claims

General Motors is offering to fix 2.2 million older small cars to prevent their keys from getting stuck in the ignition. These units are the same vehicles that GM recalled in February and March for a faulty ignition switch tried to 38 deaths. The vehicles cover MY2003-2011 Chevrolet Cobalt, Saturn Ion and other small cars, excluding those with manual transmissions.

GM has notified dealers of a "special coverage adjustment" that offers a free repair to customers experiencing some trouble removing the key from the ignition. The carmaker said in the notification that between three to four percent of the 2.2 million vehicles are affected by the stuck keys issue.

According to a bulletin sent to GM dealers, cars suffering from the issue might have a transmission shifter that doesn’t properly transmit an electrical signal that enables the ignition key to be turned back from the “accessory” position to the “lock” position.

Read the entire article GM offers to fix 2.2 million small cars over stuck keys in ignition

General Motors is replacing ignition keys on its newest trucks due to a design issue that can make the shift lever to bump the key and shut off the engine. According to the carmaker, its investigators have concluded that the issue was not a safety defect as it only happens the driver is stepping on the brake and is shifting gears.

Thus, instead of issuing a safety recall, GM sent a technical service bulletin to its dealers early November, telling them to replace keys of customers complaining of a problem.

The bulletin covers MY2014-2015 Chevrolet Silverado and GMC Sierra 1500 pickups, and the MY2015 Chevrolet Suburban and Tahoe and GMC Yukon and Yukon XL SUVs, but excludes those with keyless start buttons.

Read the entire article GM to replace ignition keys on new trucks over design issue

If you are an investor looking to invest in stocks right now, then General Motors could be a good buy for you. Likewise, GM may be the best buy in the auto industry, according to a consensus of analysts who are noted the carmaker’s highest-quality vehicles in decades and strong operating margins.

Despite very strong sales in the United States and expected record global sales in 2015, its shares are trading 7.7 times estimated earnings for the next four quarters, which means GM is around 23 percent less expensive than Toyota Motor Corp. and 55 percent discounted to the Standard & Poor’s 500 Index.

So far, the only thing weighing on GM’s stock is the fallout from its recall of millions of vehicles due to faulty ignition switch, which has also veiled the progress the carmaker has made since Mary Barra sa as chief executive in January.

Read the entire article Analysts consider GM shares a good buy despite current recall crisis