SoylentNews is people
SoylentNews
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.
(Score: 0) by Anonymous Coward on Monday December 19 2016, @10:10PM
> If a building is found to be built incorrectly after completion, what you find is the project company has been wound up, has no assets to speak of, and any guarantees are worthless, and the parent company has no obligations.
I was told in architecture school that it hasn't always been like this. When the construction-scaffolding/shoring-timbers were removed from middle ages cathedrals and other large buildings, the architect had to stand underneath. If the project spanned more than one generation (common for cathedrals) it might be the designer's grandchild that had to stand underneath the arch or dome. Helps to explain why big buildings from hundreds of years ago are still standing--by and large, the architects didn't have a death wish.
It's somewhat surprising that this isn't part of the ancient common law that forms the basis for present laws.