Chrysler Bankruptcy Will Leave Product Defect Victims Empty-handed

Jason Knowles

Attorney

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There is an interesting article in the June 10, 2009, issue of BusinessWeek which discusses the effect of Chrysler’s bankruptcy protection on those injured or killed by a faulty Chrysler vehicle. Under the terms approved by the Bankruptcy Court on June 1, 2009, the “new” Chrysler will not be liable for product defect claims involving any vehicles sold before it came into existence. Thus, under the Court’s order, it appears that anyone with a pending injury or death claim against Chrysler has no hope of recovery and that the “new” Chrysler is shielded from suits filed by anyone injured in a future accident involving a Chrysler vehicle currently on the roads.

My brother, Alexander City, Alabama attorney Jeremy Knowles, whose firm, Morris, Haynes & Hornsby, won a $52 million verdict against Chrysler in 2005, summed it up best when he told BusinessWeek that “people with personal injuries or life-ending injuries should be at the top of the list, not the bottom”.

The looming question now is whether General Motors will win the same kind of liability protection in its bankruptcy case. With about 31 million Chrysler vehicles on the road and about 74 million GM vehicles on the road, according to the Insurance Institute for Highway Safety, the bankruptcy courts’ decisions will profoundly affect thousands of consumers and accident victims.