Smithtown family's GM lawsuit hurt by bankruptcy

Monday, June 8, 2009

More than two years ago, 10-year-old Amanda Dinnigan was a passenger in a GMC Envoy driven by her mother when the car went out of control and struck a tree about 500 yards from their Smithtown home.
Amanda was left a quadriplegic, and her family has sued General Motors, alleging that the vehicle's seat belts were defective. But Amanda's chances of collecting money from GM, which filed for bankruptcy protection last week, are dim, bankruptcy lawyers said Monday.
That is because bankrupt Chrysler has been made free of all ongoing auto accident claims that blame a death or serious injury on a defective part. GM's chief executive Fritz Henderson said last week he expects the automaker will follow Chrysler's lead on the personal-injury issue.

The government will own 60 percent of Chrysler. But a Treasury Department spokeswoman said in a statement the agency "was not involved" in the decision to eliminate product liability claims. Treasury said Chrysler's decision was "consistent with conventional bankruptcy practices."
But consumer lawyers critical of the bankruptcy plans regarding injury claims say the Chrysler-GM bankruptcies were handled differently than others. Joanne Doroshow, executive director of the Center for Justice & Democracy in Manhattan, said victim compensation funds were established in two cases - in the 1970s when thousands of women were injured after using the contraceptive Dalkon Shield, and again in the 1980s, when people developed mesothelioma based on asbestos-related injuries.

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