Firm Moves Case Out From Under Bankruptcy Stay

Years ago, we started a lawsuit against General Motors Corporation and Island Chevrolet on behalf of a family injured in a single-car accident. The client’s car was brought into Island for service regarding the rack and pinion steering on their SUV. Apparently, a part was installed upside down into the steering mechanism. After the SUV was driven for about 1 mile, the pin fell out, causing all steering to be lost. The SUV crashed into a pole and fire hydrant, causing the occupants to suffer significant injuries.
We filed suit on the occupants behalf against Island Chevrolet for negligence in their repair of the steering mechanism and against General Motors for improperly training the mechanics, known as Goodwrench certified mechanics. At our first court appearance after the filing of the complaint, General Motors announced that they were declaring bankruptcy. Since GM was such a huge company, and the government had an interest in allowing GM to emerge from bankruptcy as quickly as possible, all the liabilities were left in a company called Motors Liquidation Company. This “company” held all the personal injury claims against GM. There was even talk about dismissing all personal injury claims until a group of lawyers representing those people severely injured or killed by GM products spoke out and stopped that idea.
What the bankruptcy filing did was to delay thousands of cases across the United States for years, without any hope of a quick resolution. When a company files for bankruptcy, no action can be taken against without an order of the court. All proceedings, regardless of the injuries involved, stop until the company emerges from bankruptcy. Recently, Motors Liquidation Company proposed a “take it or leave it” solution to the bankruptcy stay. The company “offered” $1,000 to settle individual claims against it, regardless of the injuries. The claimant would be able to counteroffer and if the counteroffer was refused, binding mediation would result. If a claimant refused to agree to those demands, the case would be lumped in with thousands of other unsecured claims for possibly years to come before any resolution.
After today’s meeting with the clients, we agreed to submit a counteroffer and submit to binding arbitration if the counteroffer is not accepted. So for the clients, after years of waiting for their case to be resolved, there is some light at the end of the tunnel.