GM fund approves 3 new death claims to 67

David Shepardson
Detroit News Washington Bureau

General Motors Co.’s ignition switch compensation fund on Monday said it has approved three new death claims linked to its delayed recall of 2.6 million vehicles, raising the latest total to 67 deaths.

The fund also said it approved five new injury claims. Of the 113 injury claims approved so far, 11 are for the most serious injuries and 102 are for less severe injuries.

The fund’s deputy administrator, Camille Biros, said earlier this month that the fund has extended 109 offers; 84 have been accepted and five have been rejected. That’s the first time the fund has said any claims have been rejected. Biros said 50 payments have been made or are in the process of being made. If a person or victim’s family accepts an award, it must give up the right to sue GM.

GM initially said last year that 13 deaths were related to now-recalled Chevrolet Cobalts, Saturn Ions and other cars with ignition switches that can inadvertently shut off the engine and disable power steering and air bags. The automaker delayed recalling the cars for nearly a decade after some within the company became aware there was a problem.

The fund is using a much broader definition to determine if deaths are related to the defect — including pedestrians who may have been killed as a result of a defective GM car.

Some people have sued GM seeking compensation. GM is fighting in U.S. Bankruptcy Court to bar claims from owners who say they have suffered economic losses and some personal injury claims for crashes that occurred before its June 2009 emergence from bankruptcy as a new government-sponsored firm made from the good assets of “old GM.”

In total, 4,342 claims were submitted by the Jan. 31 deadline, including 478 death claims. To date, 820 total claims have been ruled ineligible, including 129 death claims. A total of 1,492 claims are still under review — including 133 death claims — while 784 have been submitted without documentation.

A surge in claims before the Jan. 31 deadline means the program will spend until at least “very late spring” before it can rule on all the claims, the fund run by compensation lawyer Ken Feinberg said last month.

Feinberg has said it could take as long as six months from the time the program received the final claim for serious injuries or deaths.

GM set aside $400 million to pay claims but said it could be as high as $600 million. GM Chief Financial Officer Chuck Stevens last week declined to offer any update on whether the claims would remain in that range.

Feinberg has said all approved death claims will get at least $1 million. Based on the claims received and payments made, GM is not expected to see its costs top that range, but there are still hundreds of claims that haven’t been reviewed.

GM faces investigations by the Justice Department, Securities and Exchange Commission, and 49 state attorneys general into its handling of the delayed recalls. GM CEO Mary Barra fired 15 in the aftermath of the recalls and paid a then record setting $35 million fine to the National Highway Traffic Safety Administration.

In a recent regulatory filing, GM said it has paid $93 million through its compensation program for those killed or injured as a result of defective ignition switches.

Last week, GM said it had settled a second lawsuit over the death of a 29-year-old woman that helped trigger the recall of 2.59 million cars because of faulty ignition switches. The settlement came after assistance from Feinberg.

Lawyers representing Ken and Beth Melton, whose daughter Brooke Melton died while driving a 2005 Chevrolet Cobalt in a March 2010 crash, said Friday the case was resolved with a confidential settlement “after accomplishing goals of bringing cover-up to light and holding GM accountable for consumer safety.”

“One of the most important issues for the Meltons was accountability,” Georgia attorney Lance Cooper said in a statement. “This is a company that concealed this defect for years. They wanted to hold GM accountable, and that is what refiling the lawsuit did. They are grieving parents who simply wanted the truth and for no one else to suffer a similar loss.”

GM confirmed the settlement, but would not discuss details, citing the confidentially agreement.

This is the second settlement between the Meltons and the Detroit-based automaker. In 2013, the family settled with GM for $5 million. They filed this second lawsuit last year after more details about the faulty switches came to light. The most recent suit claimed the automaker fraudulently concealed evidence and that a corporate representative committed perjury in the original case.

The 2010 crash was initially attributed Brooke Ms. Melton losing control of her car on a rainy night near Atlanta. But an investigation by Melton and hired experts revealed the vehicle was equipped with a faulty ignition switch that allowed the key to turn out of the “run” to the “accessory” or “off” position, shutting off the engine and disabling power steering and braking, lights, and air bags.