GM has reportedly accepted changes to their original bankruptcy plan after being pressured by a group of state attorneys general.  GM has agreed to accept legal responsibility for injuries that result from vehicle defects after they emerge from bankruptcy protection.  The agreement reportedly allows injured consumers to bring product liability claims against GM in their post-bankruptcy form as a government owned entity.  Originally, the automaker had planned on shedding the responsibility of liability for vehicle defects, as Chrysler did in the wake of their bankruptcy.

According to court documents, GM claimed that it was not required to take the liability claims because federal pre-emption dictates that the bankruptcy code supersedes state law dealing with car-accident victim’s rights.  If GM’s original plan were accepted, these victims would have been treated as unsecured creditors.
 
But a group of state attorneys general, along with consumer groups, reportedly insisted that future car-accident victims would have no way of knowing they might be entitled to claims and would consequently be robbed of their legal rights.

However, the story is different for car-accident victims with claims against the current GM entity.  These parties include those with pending lawsuits, those who have won damages before GM filed for Bankruptcy and who get in accidents while they are in bankruptcy protection.  They reportedly will not be able to bring claims against the new GM and will remain unsecured creditors against the old entity.  According to one report, a committee representing car-accident victims with suits against GM said there are more than 300 people with personal injury claims in excess of $1.25 billion.  As unsecured creditors, they are reportedly likely to receive little or nothing.