GM hires law firms it works with to probe recall response

Tue Mar 11, 2014 6:44am EDT
 
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By Ben Klayman, Paul Lienert and Nick Brown

DETROIT (Reuters) - General Motors hired two law firms with ties to the automaker to look into its recall of cars blamed for 13 deaths, and a Congressional committee said it would also investigate the company's response to a defect that first came to light a decade ago.

The internal probe will be led by Jenner & Block Chairman Anton "Tony" Valukas, who investigated Lehman Brothers after the financial services firm collapsed in 2008, and alleged then that Lehman used accounting gimmicks and had been insolvent for weeks before it filed for bankruptcy.

GM has worked with Jenner & Block since 2002, and at least two of the automaker's former top attorneys, Robert Osborne and Elmer Johnson, were partners at the Chicago law firm.

GM said lawyers from King & Spalding, which represented GM during some of its bankruptcy proceedings and other litigation work since, will also work on the recall review ordered up by GM CEO Mary Barra. Co-leading the recall investigation with Valukas is GM's current general counsel, Michael Millikin.

"CONFLICT OF INTEREST"

Some legal experts said there could be a conflict of interest for law firms with working ties to GM to be involved in the investigation.

"To me, there's a conflict of interest," said Monroe Freedman, a legal ethics expert and law professor at Hofstra University School of Law. "A reasonable person might question whether the firm wants to curry favor with GM, so it can maintain a good relationship or obtain future work."

GM spokesman Selim Bingol said there is no conflict of interest, and Valukas "has been charged to go where the facts take him and give the company an unvarnished report on what happened. He is the ideal person to do that, given his understanding of our business and his reputation for adhering to the highest standards."   Continued...

 
General Motors Co's new chief executive Mary Barra addresses the media during a roundtable meeting with journalists in Detroit, Michigan in this photo taken January 23, 2014. REUTERS/Carlos Osorio/Pool