GM to SCOTUS: Our Real Birthday is 2009, Not 1908
Automaker wants to be shielded from lawsuits from before bankruptcy
By Jenn Gidman,  Newser Staff
Posted Dec 15, 2016 11:40 AM CST
In a Nov. 4, 2016, photo, an electric Chevrolet Bolt EV, second from front, follows a gas Chevrolet Sonic off the assembly line during a tour of the General Motors plant in Orion Township, Mich.   (AP Photo/Duane Burleson)

(Newser) – General Motors has been cruising along since 1908, but the automaker recently decided it would rather celebrate another birthday: July 10, 2009, making it just a tad over seven years old instead of 108. And the reason GM picked that specific date: That was the day it was "born again" as a new company in a bankruptcy reorganization, a fact it now hopes will get it out of further lawsuits for its ignition switch debacle, the Wall Street Journal reports. The company made the request via a petition Tuesday to use this shield in what Salon is calling a "Hail Mary pass" to the US Supreme Court, asking the high court to overturn an appellate court's decision that the company is fair game for legal complaints against it, even if they were from before 2009. The faulty switches caused 124 deaths and at least 275 injuries, Reuters reports.

GM's main argument is that in 2009 it initiated a "363 Sale," a bankruptcy reorg that allowed a company to scoop up a debtor's assets and then be "free and clear" of all that debtor's liabilities. But GM effectively "bought" itself —"General Motors Corporation" moved its assets to the newly organized "General Motors Company"—and a Harvard Law School expert in corporate bankruptcy says this facet of the law is meant to protect third-party buyers, not a company like GM in this case. "It was General Motors selling to a reorganized version of itself," he says. "The factories were the same, the employees were the same." The Journal notes unblocked lawsuits could translate to "billions of dollars" in claims; GM has already paid up around $2 billion in settlements and penalties tied to the ignition switches. The Supreme Court is expected to address the issue next year.

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