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posted by Fnord666 on Monday December 19 2016, @12:57PM   Printer-friendly
from the that's-not-how-reincarnation-works dept.

When a company reorganizes itself through a bankruptcy, is it the same company? And if so, is it liable for alleged wrongdoing committed by the previous version of itself?

These are questions raised by General Motors' efforts to dodge hundreds of lawsuits related to a potentially fatal ignition-switch flaw in millions of its older sedans. After receiving a stinging defeat in a federal appellate court this past summer, the automaker is now making a Hail Mary pass to the U.S. Supreme Court to try to convince judges that it has reincarnated into a seven-year-old car company free of liabilities from its previous life.

With potentially billions of dollars' worth of personal and financial injury claims at stake, the Detroit automaker's lawyers argue that allowing these lawsuits to go through would undermine an important aspect of corporate bankruptcy: giving assurance to the buyers of troubled companies that they aren't also buying a whole bunch of unexpected legal headaches.

But in GM's case there was no outside buyer. It essentially bought itself (with taxpayer money) in the wake of the mortgage-lending crisis that tipped the nation into recession and steered the American auto industry into a ditch.


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  • (Score: 1) by ncc74656 on Monday December 19 2016, @09:23PM

    by ncc74656 (4917) on Monday December 19 2016, @09:23PM (#443345) Homepage

    I drove a Jeep renegade a while back, it had "SINCE 1941" in big letters on the dashboard. The new GM wouldn't be able to do that.

    Jeep's had even more owners than GM. Off the top of my head, there's Kaiser, AMC, Renault, Chrysler, and now Fiat...did I miss any?

  • (Score: 0) by Anonymous Coward on Monday December 19 2016, @09:57PM

    by Anonymous Coward on Monday December 19 2016, @09:57PM (#443374)

    Yes, you missed Daimler-Benz, followed by the carpetbagger years of Cerberus Capital Management and Nardelli (from Home Depot) who nearly ran Chrysler (including Jeep) to the ground before the government gave the pieces to Fiat. For Jeep there might even be more (didn't dig back...)