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GM pressured to compensate victims in faulty ignition crashes

Published on Mar 14, 2014 10:04 AM

NEW YORK (REUTERS) - General Motors Co is facing increasing pressure to compensate victims for an ignition defect that prompted the recall of 1.6 million vehicles, even if some would-be plaintiffs are barred from suing the auto maker under the terms of its emergence from bankruptcy in 2009.

GM is a different legal entity than the one that filed the 2009 bankruptcy that shook the US economy. The so-called "new"GM is not responsible under the terms of its bankruptcy exit for any legal claims relating to incidents that took place before July 2009.

But with a massive recall on its hands and accusations the company knew of the defect for a decade, GM is facing pressure from consumer groups that say the arrangement would unfairly bar victims from getting the compensation they deserve.

On Wednesday, two prominent consumer advocacy groups called on GM Chief Executive Officer Mary Barra to create a US$1 billion (S$1.27 billion) trust fund to pay victims.

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