General Motors is trying to fight consumers who claim the value of their cars plummeted after last year’s GM’s ignition switch recall.

The motor company states they are a considered a new company (popularly referred to as “New GM”) after going through bankruptcy and are not liable for the alleged faults of “Old GM.” However, car owners are arguing that GM’s bankruptcy should not, and does not, shield them from being sued in GM ignition switch lawsuits.

Plaintiffs filed their brief in New York’s bankruptcy court just last month at the end of the 2014 year.

With over two million vehicles affected by the ignition switch recall, and thousands of ignition switch lawsuits currently in litigation against automobile company, GM tried to use a court order from its Chapter 11 bankruptcy to shield themselves from about 130 lawsuits seeking compensation for devaluation.

GM is already facing severe financial costs because of ignition switch settlement awards for the injured parties and families of those killed due to the GM ignition switch defect, establishing a crash compensation fund to deal with the claims. But the devalued car plaintiffs aren’t having it, since the ignition switch fund does not compensate them for the decreased value of their cars thanks to the ignition switch defect.

According to the plaintiffs’ legal counsel in this General Motors ignition switch lawsuit, “When standing before the American people, GM claims to take responsibility, but in the courtrooms of America, it seeks the opposite, attempting to evade responsibility for its illegal acts.”

In August 2014, GM tried to widen the scope of their bankruptcy shield to include protection against the class action lawsuits alleging cars not included in the recall also depreciated in value.

Now the same said plaintiffs are reliant on the decision of U.S. Bankruptcy Judge Robert Gerber, the same judge who managed GM’s 2009 Chapter 11 bankruptcy filing.

During General Motor’s bankruptcy proceedings, the plaintiffs’ claim Judge Gerber provided, “New GM with total immunity from liability, for its own actions and for the actions of Old GM.” However, in that filing, plaintiffs allege what Judge Gerber didn’t know “was what exactly GM executives knew” during the process of reorganization and whether or not they repressed information about the ignition switch defect to expedite their exit from Chapter 11.

GM continues to deny all liability.

Individuals involved in the ignition switch lawsuit argue that GM’s attempted action abuses bankruptcy law, and that their failure to announce the defect violated their rights to due process. Their ignition switch lawsuit states, “New GM’s arguments ignore the constitutionally protected due process rights of the Plaintiffs and are a dangerous invitation to abuse the bankruptcy process whenever a company knows of serious liabilities but chooses not to disclose them and seeks, instead, to transfer its valuable assets to a ‘new’ company while attempting to leave its undisclosed liabilities behind.”

The plaintiff’s further allege that had they known the original order would eliminate their rights, they would have objected prior GM’s bankruptcy.

The General Motors Ignition Switch MDL is In re: General Motors Liquidation Co. et al., Case No.1:09-bk-50026, in the U.S. Bankruptcy Court for the Southern District of New York.

A History of Ignition Switch Defect Troubles

The ignition switch issue allegedly found in a number of GM cars can, if involuntarily bumped by the driver,  unintentionally turn off the vehicle while in drive, disabling the power steering and the airbags.

It has been alleged in several ignition switch complaints that General Motors knew about the problems with its ignition switch for at least 10 years, but did nothing to protect the public. Moreover, “Old GM” had a history of not following through with proper repairs.

According to this most recent ignition switch lawsuit, “On November 19, 2004, Old GM initiated a Problem Resolution Tracking System (‘PRTS’) to address the inadvertent shut-off issue . . . Instead of a true fix, Old GM proposed other ‘solutions:’ a plug to insert in keys and a change to the key for future production. But dealers only offered the plug to customers who complained of problems associated with the ISD. And the key change, described by one Old GM engineer as a ‘band-aid,’ was not even implemented then,” plaintiffs allege.

An article in the WSJ cited emails between Delphi and a GM contract worker showing that on Dec. 18, 2013, one day after a senior executive meeting, and two months before the ignition swtich recall, General Motors placed an “urgent” order for the replacement switches. However, it wasn’t until January that GM informed auto-safety regulators of the need for an ignition-switch recall, and not until February 2014 that vehicles were actually recalled.

The initial recall covered almost 800,000 cars. Over the course of 2014, GM expanded that number into the millions.

The National Highway Traffic Safety Administration (NHTSA) fined GM $35 million for delays related to the recall, once the ignition switch defect was finally disclosed. However, the damage was already done to cars and to their owners.

The U.S. District Judge presiding over the G.M. federal litigation, Jesse Furman, has placed a hold on most of the consumer-fraud suits before him, awaiting Judge Gerber’s decision. If GM’s request to broaden their protection is approved, the plaintiffs can only access compensation from what’s left of “Old GM;” the monies that exist now with the “New GM” wouldn’t be accessible to them in their ignition switch defect claims.