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House Hearing Questions Barra about GM Compensation Fund

Tina Robinson2 years ago

When General Motors CEO Mary Barra appeared before Congress in April, she announced that GM had tapped attorney Ken Feinberg to develop a compensation fund for the families of victims seriously injured or killed in accidents involving vehicles with defective ignition switches. Now, as she testified today for a second time before a House subcommittee, many Representatives wanted to know more about the proposed GM fund.

Victims’ Compensation to be Decided by Ken Feinberg

GM has linked 13 deaths and 54 crashes to the ignition defect; however, concerns have been raised by lawyers, independent analysts, and Congressional members that the number of victims is much higher. When asked for specifics about the forthcoming fund, Barra said details were still in the process of being developed by Feinberg and expected by the end of the month. She did assert that GM wanted to include everyone who has been injured, and not just the 13 fatalities already acknowledged.

While Barra hesitated to delve into specifics about the fund, some questions that were asked and answered included:

  • Would owners who allege economic losses related to the recall be eligible? No. Those would have to proceed through the court system.
  • Would those who receive compensation through Feinberg relinquish any future legal claims? Although she hesitated to definitively answer yes or no, Barra implied strongly that they would.
  • Would there be a cap to the amount of money allotted to the fund? No.
  • Would compensation be reviewed by GM’s Board? No. Barra confirmed that Feinberg will be given free and independent control over eligibility and payment amounts, including freedom from requirements of Board approval.
  • Would GM give up its bankruptcy shield? Rep. Tim Griffin (R-Ark.) questioned Barra about GM’s liability shield provided by July 2009’s bankruptcy settlement. When Barra refused to commit to dropping that shield, Griffin strongly urged her to reconsider. Meanwhile, plaintiffs' lawyers may use information from the Valukas Report to assert that GM entered into the bankruptcy settlement fraudulently. 

Thomas J. Henry is representing more than 1,000 GM recall victims across the United States and has been investigating injuries and deaths linked to the recall since day one. The firm launched a nationwide media investigation into the recall in April, which brought forth thousands of affected individuals who had information critical to the investigation – information that the firm has handed over to federal agencies also investigating GM’s sluggish response the recall. As more and more individuals have flocked to Thomas J. Henry for representation, the firm has continued to push GM for a victim settlement fund. The firm has had several talks with GM’s victim compensation expert Ken Feinberg regarding appropriate victim compensation for the thousands affected by a fatal design flaw in ignition switches which left numerous dead and countless others seriously injured. 

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