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General Motors Faces Challenge to Determine Payouts for Cobalt Accidents

Key in ignitionAfter years of doing nothing in the face of increasing evidence of faulty ignition switches in some of its vehicles, General Motors has issued a recall of 2.6 million Cobalts. With hundreds of potential catastrophic injury claims pending related to the defective switch, including 13 fatalities and 54 accidents, the automaker has hired a victim compensation expert to put together a plan for compensation of victims. The company, which has been tight-lipped in its public discussions related to the process, could end up paying out billions to settle all potential claims.

The list of victims is unfortunately long and tragic, including:

  • Jesse Fortner, a young man who planned to join the Marines before an accident in his Cobalt left him a paraplegic
  • 17-year-old Haley Elise Van Pelt, who sustained a catastrophic brain injury (and more than $1 million in medical expenses) when her 2003 Saturn Ion crashed
  • Trenton Buzard, just under a year old when his aunt and great-grandmother were killed in a Cobalt accident that left him unable to walk.

The defective ignition switch has been shown to suddenly cut off all power in a moving vehicle, including mechanisms that control power brakes, steering and even air bags.

General Motors is currently in Chapter 11 bankruptcy, so the resolution of the defective ignition claims is critical to the company’s future. The company would prefer that all claims are settled through the proposed compensation fund. To that end, the company has indicated that it will not attempt to deny any claims for injuries that occurred before July 10, 2009, as it has aggressively tried to do in lawsuits filed against it. General Motors restructured in 2009 and its attorneys have argued, at least in court, that any claims against the new GM are invalid if they occurred before the restructuring took place. They sought to dismiss a lawsuit filed by Trenton Buzard’s family, arguing that the 2005 Cobalt in which he was injured was not manufactured by “the new GM.”

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