GM bankruptcy enters appeal phase

The judge in the GM bankruptcy gave approval for the sale of the company’s good assets to a newly restructured company late Sunday night, but he also stayed his order for four days to allow for appeals of the order from parties objecting to the sale. Several appeals have already been filed with the district court, including one from a group of people who are suing GM for injuries from allegedly defective products:

Groups representing plaintiffs in car accidents said Monday they would oppose General Motors’ attempt to quickly exit bankruptcy protection, arguing that hundreds of victims could be hurt by the government-led plan…

Steve Jakubowski, who filed the appeal notice for the accident litigants, said his appeal would assert that the bankruptcy judge overstepped his authority by preventing victims from pursuing litigation under their state product liability laws.

He estimated that about 1,000 lawsuits could be pending with potential damages in the range of hundreds of millions of dollars.

The appeals will follow the same pattern as in the Chrysler case, but this one has a legitimate chance of winning. That would not scuttle the sale entirely; more likely it would just force the terms of the sale to be amended to transfer liability in those cases to the New GM.

As currently configured, liability for those lawsuits would remain with the old GM, which would make it far less likely that a successful plaintiff suing the company would ever receive the compensation they are entitled to from their suit.