GM fund approves $594.5 million in ignition claims

Thu Dec 10, 2015 12:10am EST
 
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By David Shepardson

WASHINGTON (Reuters) - General Motors Co's (GM.N: Quote) independent fund set up to compensate victims of accidents involving faulty ignition switches awarded $594.5 million and approved 399 death and injury claims, the fund said on Thursday.

GM's costs related to the ignition switch defects now top $2 billion, including a $900 million settlement with the U.S. Department of Justice in September, the fund said in its final report before winding up operations.

The fund run by compensation expert Ken Feinberg said 91 percent of proposed awards were accepted by the victims. That included all 124 death claims, and 16 of 18 serious injury claims.

The Detroit automaker set up the fund in June 2014 under intense legal and political pressure for failing for nearly a decade to disclose ignition defects in older cars.

The fund covered injury and death claims in 2.6 million cars recalled from 2003 through 2011. Neither GM nor Feinberg sought to reduce awards if victims bore partial responsibility, or if crashes occurred before GM emerged from bankruptcy restructuring in July 2009 as a new company.

Seventy-four percent of approved death claims and 61 percent of all eligible claims had at least one issue involving unsafe behavior by the driver, such as not wearing a seat belt, speeding, drunk driving or falling asleep behind the wheel, the report said.

GM was not legally required to pay nearly one-third, or 128 of the 399 claims approved, because they took place before the company's June 2009 bankruptcy, the report said. Only one victim has yet to decide whether to accept the compensation offer.

Claimants who were not physically injured in this and other cases are appealing a U.S. court ruling upholding GM's bankruptcy shield.   Continued...

 
The GM logo is seen at the General Motors Lansing Grand River Assembly Plant in Lansing, Michigan October 26, 2015. REUTERS/Rebecca Cook/Files