GM Product Liability Lawsuits for Future Vehicle Defects Will Survive

General Motors has agreed to maintain responsibility for future product liability lawsuits over defects with their cars manufactured prior to the bankruptcy and reorganization, providing consumers with a level of protection that was not afforded with the Chrysler bankruptcy and sale to Fiat.

According to a court filing released on Friday, GM will assume liability for future lawsuits involving vehicle defects. However, under their proposal, plaintiffs with pending lawsuits and individuals who are injured in an accident that occur while the company is under bankruptcy protection will still be classified as unsecured creditors against the old GM.

There are more than $1 billion in pending product liability lawsuits against GM, according to some experts. These plaintiffs will be relegated to the back of the line when it comes to divvying up the old company’s assets and it is unlikely they will be able to collect much, if anything, for their damages.

Before Friday’s filing, GM was pushing to shed all product liability, meaning that plaintiffs would have been unable to go after the “new” GM for problems with “old” GM cars.

GM had asked U.S. Bankruptcy Judge Robert Gerber for immunity similar to what Chrysler received, but they faced strong opposition from state attorneys general, consumer advocacy groups and a committee of unsecured creditors.

The concession was made ahead of an expected request on Tuesday that Judge Gerber accept and approve GM’s bankruptcy plan.