Court ruling means GM will face more ignition suits

General Motors will face additional lawsuits over its ignition-switch defect after a US appeals court Wednesday ruled that the US automaker's 2009 bankruptcy does not shield it from litigation.

The case reversed an earlier bankruptcy court ruling that GM should not be liable for potentially billions of dollars worth of claims over cars with defective ignitions made by "Old GM" before the company underwent bankruptcy reorganization seven years ago.

Plaintiffs had argued that the post-bankruptcy "New GM" should still be liable given that GM personnel knew well before 2009 that the ignition switch was prone to shutting off while driving and could lead to lethal accidents.

The defect has been linked to more than 100 deaths and hundreds of serious injuries.

The appeals court cited evidence of consumer complaints as early as 2002 when GM began selling cars with the defect.

"New GM essentially asks that we reward debtors who conceal claims against potential creditors," the court wrote. "We decline to do so."

GM was dominated by a "corporate culture that sought to pin responsibility on others," the court ruled.

The ruling overturned the April 2015 decision by bankruptcy judge Robert Gerber that shielded New GM from claims of Old GM, in part because there was no evidence of fraud by GM during the bankruptcy.

Gerber was the judge who presided over the 2009 bankruptcy reorganization.

Thousands of people have claimed damages linked to the ignition defects, which GM admitted it hid for more than a decade before it began recalling 2.6 million cars worldwide in February 2014.

GM has also established a compensation program that reviewed 4,343 claims and concluded that 399 merited payment totaling $594.5 million.