GM to pay at least 51 in faulty ignition settlement

DETROIT – The families of 51 people who died in crashes caused by faulty ignition switches in small General Motors cars will get payments from a company fund, but others will have to wait months for decisions on thousands of new claims.

Compensation expert Kenneth Feinberg has also deemed 77 people injured in crashes as eligible for payments from the fund, which received at least 4,180 claims by a Saturday deadline, including more than 1,100 in the past week.

But attorneys, lawmakers and at least one family member say some were forced to settle with Feinberg rather than run the risk that they would not be able to sue GM because of its 2009 bankruptcy agreement.

Camille Biros, deputy administrator of the fund who has worked with Feinberg to compensate victims of the 9/11 terrorist attacks and the BP oil spill, said the last-minute flurry of activity is common in compensation cases. She said the number of claims could rise, because those filed by mail had to be postmarked by Jan. 31.

More death and injury claims are likely to be granted, Biros said, but it could take until late spring to sort through all the paperwork.

GM was aware of faulty ignition switches on Chevrolet Cobalts and other small cars for more than a decade, but it did not recall them until 2014. On 2.6 million GM vehicles worldwide, the switches can slip out of the “on” position, causing the cars to stall, knocking out power steering and turning off the air bags.

Plaintiff’s attorneys and some lawmakers have said the fund deadline should have been extended because victims do not know yet whether they can sue General Motors Co., the new company that emerged from bankruptcy protection in July 2009.

The bankruptcy agreement sends claims from pre-bankruptcy crashes to “Old GM,” which has few assets. Some lawyers are seeking to overturn that, claiming that GM deceived the bankruptcy court by hiding the switch defect. GM has asked the court to enforce the bankruptcy order, and a hearing is scheduled for later this week.

As of Sunday, the fund had received 455 death claims and 3,447 for injuries. Of the total, Feinberg has decided that about 12 percent, or 482, aren’t eligible for payment. Another 965 have deficient information, while 1,502 were turned in without documentation. Another 1,103 claims are under review, according to a posting on the fund’s website.

People will be given several chances to provide information to back up their claims, Biros said. Most of the denied claims were not models covered by the fund, or the air bags inflated in the crashes. If the air bags deployed, that means the cars had power and the ignition switches were working and not at fault, Feinberg has said.

About 40 claims have been paid thus far, but Biros and GM would not say how much money had been awarded.

Around half the death and injury claims granted so far involve people 25 years old or younger, Biros said. The Cobalt and other small cars with the bad switches were sold largely to younger people because they were inexpensive and marketed by GM as being safe. But experts say younger, inexperienced drivers would be less able to handle a car that had stalled and lost its power steering.

Last year GM set aside $400 million to make payments, but conceded that could grow to $600 million. Compensation for deaths starts at $1 million. GM has placed no cap on the amount of money he can spend, Feinberg has said.