June 3, 2009 -- Bankruptcies by General Motors and Chrysler will take the companies largely off the hook for billions in legal claims by car owners who say they were victims of GM's poor manufacturing, according to experts and company executives.
For years, the Chrysler company has faced claims that some of its Jeeps went into reverse even after they were put into park. In 2007, California college student Farbod Nourian suffered a serious back injury when it allegedly happened to him.
But Nourian and hundreds of other accident victims suing Chrysler for a variety of alleged defects learned this week they are out of luck.
A judge has ruled the post-bankruptcy Chrysler will not have any liability for past problem.
"The government seems to be pushing this through to streamline the procedure so rights are minimized," said lawyer Barry Bressler, who represents several people suing GM.
Today in Washington, victims joined consumer groups to express outrage at a press conference.
Among them was Jeremy Warriner, whose two legs were burned off when an allegedly defective plastic brake fluid container on his Jeep Wrangler caught fire. "I had a pending personal injury lawsuit filed against Chrysler, but due to the way their bankruptcy was written, it has now been eliminated," Warriner said.
The parents of 10-year old Amanda Dinnigan of New York fear the same will happen with their case. They say a faulty seat in a General Motors Envoy led to her paralysis, and they were counting on the results of their lawsuit to pay for Amanda's care, which costs them $500,000 a year. " We lost Amanda's rights to a fair trial," said Amanda's father, Bob Dinnigan.
With Bankruptcy, GM, Chrysler Avoid Liability Suits
Until now, Chrysler had been paying out about a quarter billion dollars a year in such lawsuits, and GM has been paying much more.
Chrysler says it will take into account all legal claims, but at best, executives have testified, victims will get no more than a half penny on a dollar, and more likely zero.
The Treasury Department denied it was involved in the decision.