Chrysler Group to remain sheltered from lawsuits

Despite the agreement General Motors reached to accept future product liability lawsuits for products made and sold before it filed for bankruptcy, Chrysler Group will remain shielded from such actions. Neither company will have responsibility for currently active lawsuits. Chrysler’s were left with the “old Chrysler” which is still in Chapter 11 bankruptcy and GM’s will be handled the same way. Since damages will have to be paid out of the assets remaining in both cases, the chances for a large recovery are diminished.

The reasoning for the difference in the two companies liabilities is that the “New GM” will still incorporate much of the former company while Chrysler assets were sold to a new company operationally controlled by Fiat SpA, which has no liability for Chrysler products sold before it assumed control.

Chrysler Group spokesman Mike Palese said, “All bankruptcies are not alike, and in Chrysler’s bankruptcy the ability to form a new company free from the product liability burden of the old company was essential to the new company’s survival.”

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