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News and Information about bankruptcy and lawsuit
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There may soon be a ruling from a U.S. bankruptcy judge on whether the 2009 government-led restructuring of General Motors Co. had improperly favored hedge funds. GM may lose almost $1 billion if it gets an adverse decision. Judge Robert Gerber has to decide if a "lock-up agreement" in the restructuring released $367 million to a certain hedge fund noteholders at the expense of other creditors.
A lawsuit was filed by a trust that represents unsecured creditors to undo the lock-up agreement, asserting that it was a last-minute agreement hidden into GM's bankruptcy to guarantee the support of the hedge funds. Soon after "Old GM" filed for bankruptcy in 2009, its premium assets were sold to the new General Motors Co. What was left of the company was liquidated to benefit the creditors.
The hedge funds, which hold notes with about $1 billion in face value, got the $367 million under the lock-up agreement; however, unsecured creditors got only pennies on the dollar. In addition, the hedge funds and other investors in the notes received a claim against "Old GM" that cost $2.67 billion. Under this lawsuit pending before the U.S. Bankruptcy Court in Manhattan, the creditors' trust claimed that the lock-up agreement was not fair to "Old GM" creditors.Read the entire article GM may lose almost $1 billion from bankruptcy-related lawsuit
Porsche is facing an unusual lawsuit, and no, it isn't about emission scandals, or missing parts. Neither is it an airbag issue or models that lack certain horsepower. Rather, it is the fact that the dashboard is too bright that people need to wear sunglasses to drive the car.
A group of unhappy Porsche owners got together because apparently, they all have the same complaint. That their German sports car have a gleaming dashboard, especially when the sun is out, as it reflects onto the windshield. Having said that, it makes the car difficult to drive as it hurts their eyes. Therefore, they will have to spend extra cash to get themselves a decent pair of polarized sunglasses.
The group created a website called DashboardGlareClassAction.com where they stated that the brightness may cause unnecessary accidents, and that the German manufacturer must do something about it. To defend itself, Porsche did say that there had been no accidents that had been reported with this complaint. What the company also intends to do to avoid further legal action from the group is that they will reimburse their customers’ sunglasses by giving them $50 to $175 depending on how much the shades are. Apparently, Porsche drivers will likely own an expensive pair of shades.Read the entire article Owners of 2007-2016 Porsche models with light interior can be refunded for cost of sunglasses
A few months ago, the United States Department of Justice charged several Volkswagen executives for the emissions cheating scandal, and one of the men was Oliver Schmidt. He was arrested back in January before his flight to Germany, and since then had been detained in US soil.
Schmidt was the former person-in-charge of the company’s regulatory compliance office. The case was filed against six other executives. On Friday, August 4, he finally pleaded guilty in the US District Court in Detroit for breaking emission laws and misleading the U.S. Government. He pleaded to a single count of “conspiracy to defraud the US to commit wire fraud and violate the Clean Air Act”.
By doing so, Schmidt could be fined between $40,000 and $400,000, while facing up to seven years in prison, before being deported back to Germany. Seven years might sound like a long time but it is a much lighter sentence than he should have faced. All in all, he was charged with 11 felony counts, and that is equivalent to a total of 169 years in prison, in other words, he will be given a lifetime sentence in prison. As expected, the 48-year-old German native took a plea deal.Read the entire article Oliver Schmidt of VW pleads guilty in Dieselgate emissions case
The aftermath of the Takata airbag recall still largely resounds in the automotive industry, as big automotive companies like BMW, Mazda, Subaru and Toyota were extensively hit with what is considered as the largest single automotive recall of all time. The said 4 companies have had to make a settlement worth whopping $553 million with the United States government. Now that hurt a lot.
Current owners of around 16 million affected vehicles equipped with the faulty Takata air bags are candidates for financial aid in getting their vehicles checked out and fixed, with up to $500 in compensation as part of new consumer settlements that involve various automakers. BMW, Mazda, Subaru and Toyota have provided a collective statement on this unfortunate situation, explaining that the said settlement would allow a series of programs to raise recall remedy completion rates for Takata airbag inflators, including other customer benefits.
Included in this plan is an outreach program that will aid the speed of the recall and repair process, supervised through traditional and non-traditional means. For example, a rental car will serve as loaner vehicles to afflicted customers when requested, or during instances when parts for the recall are not available within 30 days. In addition, afflicted customers will be able to demand reimbursement for "appropriate out of pocket expenses that is due directly to the Takata airbag inflator recalls under out of pocket claims and the remaining distribution program.Read the entire article BMW, Subaru, Mazda and Toyota offer $553 million settlement following Takata's airbag recall
German carmaker Volkswagen AG is now on the verge of closing the final chapters of its Dieselgate saga after Judge Charles R. Breyer of the United States District Court for the Northern District of California has granted final approval to a settlement agreement between the company and the US Department of Justice (DOJ) as well as regulatory agencies compensate customers affected by the group’s 3.0-liter TDI diesel engines linked to the Dieselgate emissions cheating scandal in 2015.
This agreement became necessary because of the so-called Dieselgate scandal, which is a scheme executed by VW to sell around 590,000 diesel-powered vehicles in the US – covering model years 2009 to 2016 -- by making it appear that these units were cleaner than they actually were. Regulators have found out that VW employed a defeat device that helps these vehicles cheat on emissions tests. The latest settlement agreement is more or less similar to the one relating to VW’s 2.0-liter TDI engines.
Parties in the agreement include Volkswagen AG, Volkswagen Group of America, US DOJ, the Environmental Protection Agency (EPA), the State of California, the California Air Resources Board (CARB) and the California Attorney General.Read the entire article Judge approves settlement deal for VW 3.0-liter V6 diesel engine scandal
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
Ferrari’s world is being rocked because of a lawsuit filed against Ferrari of Palm Beach alleging wrongful termination. This particular case was brought to the court by a certain Robert “Bud” Root who worked as a salesman at this local dealership.
While it initially appears to be one of the usual cases many companies face, what makes this one interesting in that Root is also alleging that the Palm Beach dealership was involved in a highly illegal practice that is odometer fraud. This is a scheme wherein the odometers of vehicles are rolled in order to give the impression that they have less mileage that they actually do. In the same suit, Root claims that since the diagnostic tool that was utilized in order to make the roll back possible was connected to the central system as part of the authorization, the brand is guilty by association.
The Daily Mail however appears to be not satisfied with that and dug deeper into the story. It appears that in January 2016, Root was fired and replaced at once by Noelle Miskulin. Miskulin was said to have later married Jay Youmans, the General Manager of the dealership. According to the report from the Daily Mail, the reason Root was fired was because he helped facilitate the scheme and thus violated business ethics. However in Root’s complaint, he did include the idea of age discrimination.Read the entire article Ferrari gets a lawsuit for odometer rollback
One of the executives at Volkswagen tagged in the so-called Dieselgate scandal has pleaded not guilty to a list of allegations surrounding the carmaker’s actions to cheat emissions regulations in the United States.
Oliver Schmidt is facing 11 felony counts in relation to VW’s efforts to deceive regulators in the US that its vehicles powered by its diesel engines were compliant with regulations. However, it was soon discovered that a cheat device was installed to hide the fact that the emissions levels of these vehicles were higher than certified. Schmidt is accused of knowingly taking in a conspiracy -- from May 2006 to September 2015 – to defraud the US and VW customers as well as to violate the Clean Air Act.
Filed by the Federal Bureau of Investigation at the US District Court for the Eastern District of Michigan, the criminal complaint alleged that Schmidt knew that VW’s diesel vehicles released higher emissions levels when on the road than when undergoing emissions tests. The complaint added that Schmidt knew that discrepancy was caused by an intentional installation of software that could detect and cheat US emissions tests.Read the entire article VW executive Oliver Schmidt pleads not guilty to Dieselgate scandal
Tesla accuses its former Autopilot head, Sterling Anderson of stealing sensitive information and poaching Tesla employees while still working for the company. The lawsuit was filed last week in the Superior Court of California against Anderson and another Tesla employee, Chris Urmson.
Anderson has worked for the electric car company since 2014 and was appointed as the head of the Autopilot team. Tesla found out that Anderson and Urmson have started recruiting co-workers to join them in their new startup since 2016. Tesla claims Anderson has allegedly downloaded the secret files using the company’s laptop, but has apparently deleted all the traces. Due to this, the company filed a suit against the two former employees for stealing intellectual proprietary information.
Since Tesla is so advanced when it comes to self-driving technology, other car companies are trying to catch up with the pace by purchasing startups. Tesla is very much aware of how automakers have built a “get rich quick environment” because of this. It was also stated in the charges how a demoware could be bought from a team of programmers for billions of dollars. To cite an example, General Motors has acquired Cruise Automation for almost 1 billion USD in 2016. Otto, another self-driving startup firm, was bought by Uber by as much as 680 million USD in the same year.Read the entire article Tesla files a suit against ex-chief of Autopilot division for stealing company info
We are guilty. We are likely to hear Volkswagen AG utter similar words soon following an agreement with the United States Department regarding the so-called Dieselgate scandal. Matters regarding the Dieselgate scandal recently took an amazing turn after Volkswagen and the DOJ reached an agreement in which the German carmaker will enter a guilty plea to three criminal felony counts and pay billions of dollars in penalty.
As part of the agreement, VW will plead guilty to: a conspiracy to defraud the United States and its customers in the country; obstruction of justice for destroying documents related to the Dieselgate scandal; and using false statements about the vehicles’ compliance with emissions limits with the aim of importing them into the US. Aside from pleading guilty, VW will be placed under probation for three years. An independent corporate compliance monitor will also be appointed to supervise VW for at least three years. VW will also pay a criminal penalty of $2.8 billion.
The agreement was an offshoot of the so-called Dieselgate scandal, which is essentially a scheme implemented by VW to sell around 590,000 diesel-powered vehicles in the US – from model years 2009 to 2016 -- by making it seem that these units were cleaner than they actually were. Regulators have found out that VW employed a defeat device that helps these vehicles cheat on emissions tests.Read the entire article VW to plead guilty to 3 Dieselgate charges and to pay $4.3 billion in criminal and civil penalties
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
California-based company Zero to 60 Designs showed off a rather flattering tribute to the new Ford GT, but it looks like Ford’s lawyers are not taking it easy on this one.
A cease-and-desist order was sent to Zero to 60 Design for creating the Mustang GTT. The Mustang GTT looks very convincing that one would think Ford actually made it which is why the American automaker’s lawyers were quick to act.
Showcased at the 2016 SEMA Show in Las Vegas, the Mustang GTT was custom fabricated in Zero to 60 Design’s facility in Corona, California, sporting a new bodywork. In just six weeks, Zero to 60 Designs was able to complete the transformation of a relatively brand-new Mustang GT coupe into this amazing creation; relatively new because it was driven for 300 miles (482 kilometers) before this transformation.Read the entire article Ford Makes Legal Move Against Zero to 60 Design's Mustang GTT
A federal lawsuit was filed on May 7 against Ford Motor Co by Versata, a Texas software company, for having stolen its intellectual property. Versata claims that Ford benefited from its software by considerably cutting warranty costs and by bringing its vehicles to the market quicker.
Last Wednesday, Versata requested a U.S. District Court judge in Texas for an injunction against Ford, which started using the software in 1998 as part of its product-development process. The lawsuit said that at the end of 2014, Ford terminated the $8.45 million-a-year contract.
It then started using a program that was developed in-house based on Versata’s proprietary software, according to the lawsuit. Versata, which cited unspecified damages, said that Ford had gotten a software patent in 2014 based on the technology that it had licensed to Ford.Read the entire article Ford faces Versata’s intellectual property lawsuit over ACM software
A lawsuit was filed in London against Tesla Motors related to a claim that it interfered with a plan by a competitor to have electric-car chargers at rest stops at highways in the UK. Last Wednesday, Judge Vivien Rose demanded that Tesla should locate and offer up documents on internal talks with other companies on establishing its own charger network for it electric cars.
In the UK, Tesla’s cars have a starting price of 50,000 pounds ($74,450). According to Ecotricity Group, Tesla entered negotiations with companies such as Tesco after it had already begun talks. Judge Rose said that it appears that in October 2014, there were meetings with motorway service providers.
This lawsuit is not surprising considering that there has been a conflict between automakers and charging network providers who want a share of growing market for electric vehicles and their infrastructure.Read the entire article Tesla faces Ecotricity lawsuit over Charging Stations Implementation
A jury in Minnesota federal court found that an accelerator flaw in a 1996 Toyota Camry was the cause of a 2006 fatal car crash in the state and ordered Toyota Motor Corp. to pay almost $11 million. According to plaintiffs’ lawyers, Toyota was found 60 percent liable for the crash while the driver, Koua Fong Lee, was found 40 percent responsible.
The plaintiffs have claimed that the crash was a result of a fault in the accelerator causing it to become stuck, and the brakes failed to work. The carmaker, however, denied that the Camry was at fault, saying the driver had been negligent. A spokeswoman for Toyota, Amanda Rice, said the carmaker was weighing its legal options.
A lawsuit was filed against Toyota on behalf of passengers injured or killed in a 2006 crash in St. Paul, Minnesota. In June 2006, Lee and his family were driving home from church when his 1996 Toyota Camry abruptly accelerated to around 90 mph and then rear ended another car, an Oldsmobile Ciera.Read the entire article Minnesota jury says Toyota is 60% liable for 2006 fatal crash
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
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
The bellwether in a consolidated litigation against General Motors over a series of safety issues -- including a faulty ignition switch – is scheduled on Jan. 11, 2016, in the Southern District of New York. The date for the litigation -- consists of around 130 lawsuits so far – was set by United States District Judge Jesse Furman.
The cases cover different suits including claims for personal injury and wrongful death. The bellwether, or test trial, will involve a personal injury or wrongful death case that will be determining in the next few months, according to Furman.
A trickle of lawsuits began piling up against GM after announcing this year that it was calling back around 2.6 million vehicles due to a possible faulty ignition switch that cause shift out of position, cut power to air bags, steering and brakes.Read the entire article First trial in consolidated litigation vs GM set in January 2016
Father and son Olivier and Sammy Wasem have filed a lawsuit in San Mateo County Superior Court against Facebook and Ferrari S.p.A., alleging that the companies have collaborated to illegally seize control of the fan pages in the social media site. The Wasems and Ferrari are also currently embroiled in a legal battle over their "Ferrari Fan Page" and a “Formula 1 Vision” page.
They are claiming that Ferrari took the fan pages with Facebook's knowledge and substantial assistance. They are also claiming that launching their fan page in June 2008, Ferrari created its own, but wasn’t as popular. They said this prompted Ferrari to ask Facebook to give it administrative control over the Ferrari Fan Page.
Ferrari then contacted the Wasems in March 2009, saying that “legal issues” had forced it to take over administration of their page, according to Automotive News. The Wasems also claim after the Ferrari co-administrator was added sans their permission, the carmaker began negotiating over a partnership to manage the fan page and create a Formula 1 page.Read the entire article Facebook and Ferrari face California suit over fanpage takeover
Lake County District Judge Deborah Kim Christopher has ruled that Hyundai Motor Co. should pay $73 million in punitive damages to the families of to the families of Trevor Olson and his cousin Tanner Olson who died in 2011 crash blamed on a steering flaw. The families originally sought $240 million in punitive damages plus $8.1 million in actual damages.
While punitive damages were reduced, Christopher upheld the actual damages awarded by the state jury. Hyundai had tried to convince Christopher to further reduce the punitive damages, but the judge rejected it. The families filed the suit in 2011, saying that Tanner Olson lost control of a 2005 Hyundai Tiburon after a faulty steering knuckle broke.
Christopher ruled that Hyundai showed “an indifference to or reckless disregard of the health and safety of the motoring public.” She noted that Hyundai had 127 warranty reports on steering knuckle over a decade -- -- problems or defects that were contrary to the carmaker’s own material specifications – but apparently took no steps to investigate.”Read the entire article Judge says Hyundai should pay $73 million to steering flaw victims
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