Speaker 1: Well, that was time for our daily Bloomberg Law Brief,
Speaker 1: exploring legal issues in the news, and today Bloomberg Law
Speaker 1: host Doing Grosso and Greg's Store discuss how GM thwarted
Speaker 1: a fifteen million dollar settlement that was intended to resolve
Speaker 1: hundreds of personal injury cases stemming from the carmaker's faulty
Speaker 1: ignition switches. She speaks with Eric Gordon, professor at University
Speaker 1: of Michigan's Ross School of Business. Eric, this is kind
Speaker 1: of complicated stuff, so just start, if you would, by
Speaker 1: explaining exactly what old GM is and what its obligations
Speaker 1: and motivations are. Old GM is a creature of the
Speaker 1: bankruptcy reorganization. In that reorganization, GM is basically split into
Speaker 1: two pieces. Old GM now referred to as the trust,
Speaker 1: and it's a liquidating trust. It's designed to pay off
Speaker 1: the obligations that had to be paid off under the agreement.
Speaker 1: The bankruptcy agreement. New GM, or what you and I
Speaker 1: think of as GM today, got spun off as supposedly
Speaker 1: a clean, new, fresh start entity. That's the purpose of
Speaker 1: bankruptcy re organization UM, so that you know it could
Speaker 1: still make cars and still employ people. Turns out. It
Speaker 1: hasn't been one fresh start. There's some there's some dangling
Speaker 1: kind of threads here. Eric. Last week there was a
Speaker 1: report that old GM, the trust had settled with plaintiffs lawyers.
Speaker 1: What happened Apparently the old GM, the trust and the
Speaker 1: plaintiffs lawyers got together and finally hammered out a deal
Speaker 1: they were happy with. They being those two old GM
Speaker 1: and the plaintiffs lawyers. Apparently New GM was not involved
Speaker 1: in that, wasn't part of the negotiations and found out.
Speaker 1: And so now we have a new agreement that I
Speaker 1: guess maybe supersedes the old old agreement. This is between
Speaker 1: new GM and old GM. Tell us about that. New
Speaker 1: GM said, okay, we'll here, we'll bring something to the table.
Speaker 1: We'll cover some goal fees. And under this new agreement
Speaker 1: between old and new GM, it's time the plaintiff lawyers
Speaker 1: are left out. Um. New GM is going to cover
Speaker 1: some legal fees and apparently all GM is going to
Speaker 1: litigate some defenses that the GM hopes will prevail and
Speaker 1: keep it from having to pay that billion dollars. That's
Speaker 1: Eric Gordon, professor at University of Michigan's Raw School of Business,
Speaker 1: speaking with Bloomberg LA host Jum Grosso and Greg Store.
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