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General Motors liabilities may have been deliberately concealed

The National Highway Traffic Safety Administration launched a defect investigation to find the cause of the problems. GM has made no announcement of a recall for the vehicle model.
The National Highway Traffic Safety Administration launched a defect investigation to find the cause of the problems. GM has made no announcement of a recall for the vehicle model.
GM / Getty Images

In a March 17 video, GM's CEO Marry Barra, announced that the "scrutiny of the recall has expanded beyond the review by federal regulators" and further investigations by two national congressional committees will "examine the issue" along with the department of justice.

GM recalls prompt criminal investigations
David McNew Getty Images

Others question whether federal agencies overseeing and analyzing GM's recalls may have operated with a conflict of interest, and possibly had reason to delay reports since the United States government owned a percentage of the automaker?

Yesterday March 18, Examiner spoke with the President of the National Legal and Policy Center, Peter Flaherty. He believes there may have been a deliberate cover-up by GM regarding the defective ignition switch linked to the recall of millions of vehicles, and some that killed drivers.

"This is what happens when government owns car companies, you get these cover-ups," said Flaherty.

Last week Flaherty sent a letter to Rep. Fred Upton (R-MI) urging the House Energy and Commerce Committee that Upton chairs, to throughly "examine what, if any, influence the U.S. government's ownership of GM has had on this troubling failure to address the dangerously flawed vehicles." His letter included other questions, but the last one wonders if GM waited to go public with the recalls until after the government "sold its final share in late December 2013?"

In other news reports GM may have been able to shed liabilities due bankruptcy shield law. But not everyone believes that GM got rid of their liabilities legally.

Bob Hilliard, a lawyer who filed suit last week, Friday March 14, in a Texas federal court is seeking billions of dollars for monetary relief due to GM concealing the "defects and devaluation" of the vehicles, because GM apparently new of these recall issues before and during the bankruptcy procedure, and the government bailout, according to a story released by Bloomberg Businessweek, March 15. And Hilliard believes this is "fraud".

"If you are aware of potential exposure to litigation and you don't reveal it, that's fraud," Hilliard said. Adding, he and other lawyers hope a "Manhattan U.S. Bankruptcy Judge, Robert Gerber will consider the terms of GM's reorganization."

He said, the recalls were part of "the liability of old GM, because it was the new GM's continued coverup after the bankruptcy that allowed people to be hurt or killed."

However, a Bankruptcy Lawyer, Chip Bowles, not involved in GM's lawsuits said, the evidence needed to prove GM did act in a fraudulent manner would need to show there was "deliberate fraud and concealment", and that the old GM hid these liabilities from the judge.

One case might help to shed light on these fraud allegations. Brandt v. General Motors LLC, 14-cv-00079, U.S. District Court, which involved a crash that killed a Georgia pediatric nurse, where documents used as evidence in this case showed that in 2004, GM Cobalt engineers had known the engines could fail due to the faulty ignition switch.

Just when GM was about to drive the company out of their bankruptcy debacle, it took a sharp turn for the worse. Seems that no one will know what the final outcome will look like for GM anytime soon. Look how long it took for Toyota Motor Corp. to finally have a settlement, which had 5 deaths versus GM who has had a dozen deaths.

Reports announced today that Toyota will "pay $1.2 billion to resolve [its] criminal probe into safety issues," according to Reuters.

Wonder if the Toyota settlement will be a starting point for GM, and not just a one-size fits all template?

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