GM’s Dangerous Lemon Saga Continues

GM Denies Calls To Extend Ignition Switch Fund Deadline
General Motors Co. doesn’t plan to extend its Jan. 31 deadline for applications to the fund it established last year to compensate the victims of a deadly ignition switch defect, the automaker said Thursday, despite pleas from two Democratic senators.
GM has decided not to extend the deadline, a spokesman for the company confirmed on Thursday, days after the fund’s administrator Kenneth Feinberg reported he had approved claims for at least 50 deaths stemming from the defect. In doing so, it refused a request from two Democratic senators who urged CEO Mary Barra to push back the Jan. 31 cutoff date for claims submissions to the fund.
In their letter to Barra, U.S. Sens. Richard Blumenthal, D-Conn., and Edward Markey, D-Mass., called the compensation fund deadline “arbitrary,” saying it did not give enough time to potential victims awaiting a New York bankruptcy court’s decision on the extent of GM’s liability to them, if any.
“We have done extensive outreach to inform our customers and have sent more than 5 million letters,” said GM spokesman James Cain. “Taken together with the publicity surrounding this, we believe that the awareness about the fund is very high. We extended the deadline once, and we decided we have no plans to do it another time.”
The ignition switch compensation fund began accepting claims in August, but GM said in November it would extend the deadline for applications to the fund from Dec. 31 to Jan. 31. The automaker made the announcement amid criticism that it had already hit long delays in notifying eligible victims, including the family of a woman who died in 2003.
Critics of the compensation fund’s short application window pointed to the automaker’s silence on the cause of death of Jean Averill, a Connecticut woman who died in 2003 when she lost control of her Saturn Ion.
Averill’s family had believed her death to be health-related, according to Bob Hilliard of Hilliard Munoz Gonzales LLP, an attorney for her family, until they learned only years later that Averill was among the 13 victims whose deaths GM acknowledges were caused by the ignition switch defect.
In their letter Wednesday, Markey and Blumenthal pointed to the ongoing criminal investigation into GM’s knowledge of the defect, as well as its reopened bankruptcy before U.S. Bankruptcy Judge Robert Gerber in New York. Gerber is considering whether GM obtained its Chapter 11 exit in 2009 by fraudulently hiding its knowledge of the defect.

“The Department of Justice is investigating whether any criminal conduct was involved in GM’s handling of the ignition switch defect. Further, several victims who have decided to pursue claims in court are waiting on a federal court determination of the extent of GM’s liability in the aftermath of its 2009 bankruptcy,” the senators said in a joint statement Wednesday.
“Put simply, right now, injured parties do not know enough about their legal rights or facts to make an informed decision,” they added. “Indeed, they cannot have sufficient information until the DOJ concludes its criminal investigation and the bankruptcy court decides whether to lift the liability shield that GM now unjustifiably hides behind.”
The administrator for the GM ignition switch compensation fund has approved 50 claims for death and 75 for injuries, according to a report he issued earlier this month.
While GM itself has acknowledged 13 deaths related to the deadly defect, which can cause the ignition switch to jostle out of position and stall the vehicle, fund administrator Feinberg has steadily approved a growing number of death claims since he began accepting claims applications.