Car Crash Victims Screwed by Auto Bailouts

GM and Chrysler were freed from most of their legal responsibilities

By Kevin Spak,  Newser Staff

Posted May 27, 2011 10:59 AM CDT

(Newser) – When the government bailed out Chrysler and GM, it freed them from most of their prior legal obligations—including billions owed to the victims of crashes involving defective cars, the Wall Street Journal reports. Though the automakers agreed to continue to be liable for new lawsuits stemming from old vehicle crashes, victims who already had cases in progress against the automakers, or who’d already been awarded money in court, are now stuck begging for some fraction of their money.

“We did what we were supposed to do, we went through the legal system,” says the grandfather of an infant who died as a result of a passenger seat defect, resulting in one of the larger damage awards at $23 million. “This is a real person. It's not just something to write off on the ledger book.” GM and Chrysler released statements expressing sympathy for the victims, but saying they were just some of the multitude who lost out in the restructuring. One former GM bondholder, for example, opines that victims “shouldn’t get a higher percentage” of the money owed them than anyone else. “I put up hundreds of thousands of dollars of bonds,” he says.

Crash dummies sit on display at a General Motors crash testing center in this file photo.
Crash dummies sit on display at a General Motors crash testing center in this file photo.   (Getty Images)
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