GM's Bankruptcy Shield Bid Will Test Asset Sale Terms

Law360, New York (April 16, 2014, 9:36 PM EDT) -- In turning to a bankruptcy court for cover from an avalanche of lawsuits over faulty ignition switches, General Motors Co. is setting up a high-profile test of whether post-bankruptcy companies should be allowed to rid themselves of product liability claims through a Chapter 11 asset sale without offering plaintiffs anything in return.

GM on Tuesday asked a Texas federal judge to pause an ignition-switch injury suit until the New York bankruptcy court that oversaw its 2009 Chapter 11 proceedings decides whether such claims can stand against the so-called "new GM." The automaker took a relatively unusual path out of bankruptcy, in...

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