GM, Chrysler Shielded from Lawsuits after Filing Bankruptcy Protection

July 11, 2009

After filing bankruptcy protection, carmaker giants General Motors (GM) and Chrysler Group LLC are shielded from any lawsuit involving defective auto parts that have killed or injured consumers. However, the companies’ dealers and suppliers are now the main targets of several product liability lawsuits.

According to reports, car accident victims in California, South Carolina, Colorado, Texas, and in some parts of the US have filed lawsuits against auto part makers and car dealers associated with GM and Chrysler to seek compensation for damages.

In an interview with reporters, the complainants’ lawyers said that suing dealers and component-suppliers is the only way for their clients to recover damages since GM and Chrysler are shielded from any lawsuit.

GM officials said they had $973 million worth of product liability claims as of March 31. Meanwhile, Chrysler declined to give such information.

With the declining sales and demand caused by global recession, GM, Chrysler, and Ford had filed several stimulus packages. In total, the federal government granted the three automaker giants with $77 billion financial aid.

While Ford has managed to stir away from financial meltdown, Chrysler filed for bankruptcy on April 30. After a month, GM followed.