Chrysler and GM Defect Lawsuits May Be Voided by Bailout

It's bad enough being a victim of a dangerous manufacturing fault in your car or truck.

But victims whose injuries were linked to defects in Chryslers say insult has been added to their physical hurt because the car giant has freed itself from liabilities for many claims under a restructuring financed by the victims' own money.

The company was restructured after a $12.5 billion bailout using public money from the government, which "allowed it to wash away legal responsibility for car-accident victims who had won damages or had pending lawsuits before its bankruptcy filing," the Wall Street Journal reported.

Shockingly, this change even applies to cases in which a jury has made an award, in one case highlighted by the Wall Street Journal, to the family of a woman whose death was linked to a defect.

Vicki Denton died during a head-on collision after the airbag in her 1998 Dodge Caravan failed to deploy. Although a jury found Chrysler responsible for her death because of a manufacturing defect, awarding her family $2.2 million, it seems the car giant no longer has to pay up.

The family was close to collecting the damages just before Chrysler's government-brokered bankruptcy. Two year after the bailout, Chrysler Group LLC doesn't have to pay because it's liabilities ended with the post-bankruptcy restructuring.

General Motors Co., which was able to lose its liabilities as part of a $50 billion bailout and restructuring, is in the same position, according to the Wall Street Journal.

The newspaper says more than 2,500 litigation claims totaling about $3.3 billion have been filed against GM's bankruptcy estate.

As experienced personal injury attorneys based in Virginia Beach, Virginia (VA), we see far too many cases in which defective goods have harmed consumers. Sadly, the automobile industry is far from immune. For instance, faulty gas tanks on 1979 Chevy Malibus manufactured by General Motors were found to explode, causing burns and other injuries to car owners and mechanics.

Cars manufactured by Chrysler and General Motors are widely driven across Virginia and North Carolina (NC), so any defects or safety recalls are extremely worrying.

Toyotas are also popular cars in the two states which makes a series of major recalls, most recently of 2.4 million Toyotas, concerning news for drivers. One major problem, according to Toyota, is that the gas pedal can get stuck in the plastic pad of the driver's side floor mat, if the floor mat isn't replaced properly after it's removed.

Sticky gas pedals on Toyotas have been linked to deaths including the deadly crash of a Toyota Camry in western Utah. Toyota has already settled at least one sudden acceleration lawsuit. Other civil cases are still pending.

DM