The newly created Chrysler Group LLC has agreed to accept exposure for personal injury claims that occur after they emerged from bankruptcy protection, where the injury was caused by an alleged defect in old Chrysler vehicles. Chrysler now says that the liability claims will not threaten the viability of the new company.
Originally, Chrysler only agreed to accept liability for new vehicles made after the bankruptcy, which would have left users of their older vehicles without a viable source of recovery if an injury is sustained in the future as a result of defects in existing vehicles.
The new company, now under partial control by Italy’s Fiat, announced last week that it will accept the older liabilities after General Motors Co. made a similar commitment. Therefore, claims for injuries sustained after they emerged from bankruptcy on June 10 will be honored. However, Chrysler personal injury lawsuits for claims that arose before the bankruptcy filing will still be limited to the assets of the old company.
General Motors accepted product liability injury claims for old GM products in the face of pressure from consumer advocacy groups and more than a dozen state attorney generals, who were upset after it appeared that Chrysler, which went through bankruptcy before GM, would be legally able to dodge old liability claims. Not wanting a repeat of Chrysler’s circumstances, they objected to GM’s bankruptcy plans until the company agreed to accept liability for
the older vehicles. GM exited bankruptcy a month after Chrysler, on July 10.
Both the new GM and Chrysler will still honor existing warranties on vehicles.