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McClatchy-Tribune  06/06/2014 12:01 AM ET
GM to offer as yet undetermined settlements to crash victim families [Detroit Free Press :: ]

June 06--General Motors will offer settlements to the families of victims killed or seriously injured in accidents blamed on an ignition switch defect the company failed to fix for more than a decade.

The company said Thursday that 9/11 compensation fund director Kenneth Feinberg will determine the size of the settlements and eligibility criteria. He'll start accepting claims by Aug. 1.

GM quietly settled at least one case for $5 million before the defect was publicized, according to an investigation conducted by outside lawyer Anton Valukas and released Thursday.

Barclays estimated GM would pay about $2.5 billion in settlements and federal fines.

GM President Dan Ammann hinted that the automaker would fight lawsuits for pre-bankruptcy crash victims who choose not to accept settlements. The company currently plans to fight lawsuits from owners of the recalled cars who seek compensation for the alleged lost value of their vehicles in the wake of the recall crisis.

But CEO Mary Barra has acknowledged that the company has a "moral responsibility" to victims. The ignition switch defect has been blamed for at least 13 deaths and 54 accidents.

Feinberg will determine the actual number of accidents and fatalities -- figures GM will disclose later, Barra said.

Legally, GM is technically protected from lawsuits arising from accidents that occurred before it exited bankruptcy in July 2009, unless victims can prove the company knowingly hid the defect from the U.S. Bankruptcy Court.

Those injured or killed in accidents that occurred after bankruptcy could sue the company instead of accepting settlements.

Carl Tobias, a product liability law professor at the University of Richmond, said the Valukas report gives significant ammunition to victims.

"It complicates Feinberg's task," Tobias said, "but I don't think it was easy in the first place."

Contact Nathan Bomey: 313-223-4743 or Follow him on Twitter @NathanBomey.


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