GM Compensation Fund Begins Aug 1st

GM Compensation Fund Begins Aug 1st

On June 5th, General Motors announced that a General Motors Compensation Fund would be created and implemented no later that August 1st. Currently it has been announced the fund will be primarily for victims of personal injury caused by the GM ignition switch recall. GM is claiming that due to bankruptcy laws the company is not required to provide compensation to customers who lost car value do the massive GM recall. Plaintiffs attorneys disagree saying that the company should provide compensation for people who lost money due to General Motors negligence.

GM Diminished Value Compensation

Reports indicate there will be a ruling in late summer in regards to the legality of General Motors requirements to provide diminished value compensation. General Motor's liability in terms of diminished value will be ruled on by U.S. Bankruptcy Judge Robert Gerber. If GM is held liable for diminished value then there is some debate on how the compensation fund would be set up. It it possible there could be 2 separate compensation funds, one for personal injury, one for the loss of value of the GM cars and trucks. According the GM's CEO Mary Barra the GM Compensation Fund is related to a variety of recalled cars from 2003-2011 that contained faulty ignitions switches.

The claims fund will be administered by Ken Feinberg, who is internationally known for his work on the British Petroleum Settlement Fund, the 9/11 settlement fund and many other various settlement funds for victims.

The announcement of a General Motors Victim Compensation Fund came on the same day as former federal prosecutor Anton Valukas released his independent report on the GM ignition recall. Barra said during her statement, "We simply didn't do our jobs. We failed these customers." The company also announced that it would be up to Ken Feinberg to determine who is eligible for the compensation fun and how much money will be set aside for victims.

Victims of General Motors ignition switch problems are not required to be included in the GM Compensation program. Victims have the ability to Opt-Out of the GM Compensation fund and file a lawsuit against General Motors. General Motors stated they will not waive it's perceived protection from the 2009 bankruptcy case, but that will be a fight in court.

General Motors also filed 15 workers on the same day this report was issued. The report, which was a few hundred pages, stated that throughout General Motors there was "a pattern of incompetence and neglect." GM is already facing lawsuits from injury victims and family members of some victims suing for wrongful death.

 

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