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U.S. appeals court revives some claims over GM ignition switch


(Reuters) — A U.S. appeals court on Wednesday reversed part of a bankruptcy court ruling that protects General Motors Co. from some legal claims involving a defective ignition switch that prompted the recall of 2.6 million vehicles in 2014.

The 2nd U.S. Circuit Court of Appeals in Manhattan said that GM must face some claims from certain groups of car owners that arise from conduct predating its 2009 bankruptcy.

The appeal involves a 2015 decision from the judge who oversaw GM’s 2009 bankruptcy, which created “New GM” to contain valuable assets while leaving behind most of its burdensome liabilities with “Old GM.”

U.S. Bankruptcy Judge Robert Gerber, now retired, ruled in 2015 that New GM was shielded from liability over Old GM’s pre-bankruptcy actions, but he allowed some “independent” claims based solely on New GM's conduct to proceed.

Some lawyers for GM customers — who have sued over injuries and deaths in accidents blamed on the ignition switch, as well as reduced vehicle value following the recalls — say that New GM should not be protected because it knowingly concealed the switch defect for more than a decade before it recalled the vehicles in 2014.