GM To Waive At Least Some Theoretic Bankruptcy Defense to Claims Arising from Ignition Switch Defect
Are bankruptcy court injunctions enforceable when they cut off personal injury claims and related rights of co-defendants without meaningful prior notice or adequate representation of the interests of the rights holders? Such persons include 1) the physical victim as well as 2) co-defendants also sued by the physical victim, and 3) may include an insurer.
GM has now said – to Congress – it will not try to enforce the terms of its chapter 11 order against ignition switch claimants, as described in this June 20, 2014 Reuters article by Jessica Dye and Julia Edwards. But the issue of the rights of co-defendants is not yet clear – to my knowledge. In other words, what will GM do (or not do) to compensate past, current and future codefendants in litigation.
Do the rights of co-defendants matter in chapter 11 cases? Ask the asbestos defendants that remain in the tort system after early and cheap tort system exits by Manville and others.