Chrysler/GM Bankruptcy's May Impact Rights of the Injured. - June 22, 2009

According to some federal statistics, 5,970 people were killed in Chrysler products in 2007 and many thousands more injured. Yet, if those injuries or deaths resulted from a defective part or otherwise faulty vehicle, the claimant may be quite likely out of luck.

When the "new' Chrysler emerged from bankruptcy under the terms approved on June 1st by U.S. Bankruptcy Court Judge Arthur J. Gonzalez, it will no longer be liable for any product defect or liability claims involving the cars it sold before the "new' company came into existence.  To get a sense of the number of claims involved, a group called the Ad Hoc Committee of Consumer-Victims of Chrysler LLC  has more than 150 members who each have tort claims involving personal injuries against Chrysler, according to Auto News.  The estimated value of those claims by the claimants and their counsel totaled more than $650 million.

Because the U.S. Supreme Court declined to intervene in the bankruptcy rulings and the sale agreement with the Italian firm Fiat closed on June 10, anyone with an existing claim against Chysler may find themselves with no hope of recovery. In addition, according to the Gonzalez order, the "new" Chysler is also shielded from future lawsuits that might be filed by anyone involved in a future accident involving any of the estimated 31 million Chysler automobiles still operating on America's highways. It is also possible that even those that have already won judgments may find that the "new" Chysler can simply walk away from the liabilty.

Because the Chysler bankruptcy involved an unprecedented involvement of governmental orchestration and financing, this bankruptcy was atypical. The expedited procedure used, known as a 363(f) sale, created a situation that meant vehicle injury victims had considerable less oppotunity to participate than in a normal reorganization.

So now the question becomes: how will similar liability issues be deposed of in a bankruptcy of General Motors? Roughly 74 million General Motors vehicles are currently in use according to the Insurance Institute of Highway Safety.

Unfortunately, it is the injured consumer that is left in the dark and will need to seek answers regarding their legal rights and the rights of their family members.