Lawyer Kenneth Feinberg set to calculates recall-related damages at GM

Article by Christian A., on April 23, 2014

Kenneth Feinberg, a lawyer tapped by General Motors to explore ways to face legal and civil obligations with regards to the current recall crisis, may soon commence calculating the damage done by faulty ignition switches in GM’s cars.

General Motors is asking a bankruptcy judge in New York to confirm its shield from liability lawsuits linked to crashes or defects that took place before its bankruptcy – a move that would render the process of compensating crash victims' families as well as car owners faster, simpler and cheaper.

Feinberg managed the fund for the victims of the September 11, 2001, attacks, and the BP oil spill in the Gulf of Mexico and the Boston Marathon bombing. Feinberg told CNBC in an interview last week that his impression was that GM was asking him to develop a program that might be employed to compensate eligible claimants against the carmaker.

He stated that issues like how much money should be dedicated to the effort and how damages would be calculated remains unknown. Sen. Richard Blumenthal, D-Conn., has urged GM to "do right by these victims” and establish a compensation fund that will “make them whole."

If GM follows the advice, it would be a first for an auto-defect case, remarked Kyle Logue, a professor at the University of Michigan Law School who specializes in tort and insurance law. He said that such move would be good public relations for GM, adding that and it could help the bottom line if it could reduce lawsuits.

Logue noted that unlike lawsuits, compensation fund is certain and is “over relatively quick." GM is expecting to take a $1.3 billion charge on its first-quarter earnings for costs related to the recall.

Brian Johnson, an analyst with Barclays Capital, said in a report in March that GM's recall-related costs could surge to between $2.5 billion and $3.5 billion, including a potential compensation fund. [source: automotive news - sub. required]

If you liked the article, share on:

Comments

Recommended

The BMW 7 Series is already highly sought after but nonetheless, the German marque is giving it a more exclusive variant for the Russian market, and they are calling it...
by - October 20, 2017
Several automakers including Porsche, Volkswagen, Smart and even Land Rover have all been victimized by cheap Chinese copycats. And if you haven’t seen it yet, the most recent one would...
by - October 20, 2017
The Mercedes-Benz G-Class has been around for quite some time now but to bid it farewell, the company has launched the Mercedes-AMG G65 Final Edition. Mercedes will only build a...
by - October 20, 2017
Have you ever wondered what you can you buy with $9,365 in your pocket? Well, you have quite a lot of options. In fact, you can even purchase a used...
by - October 20, 2017
The Audi A7 Sportback, whether you would like to call it a sportback or a four-door coupe, has always been a beautiful car. And this week, the 2019 model year...
by - October 20, 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