By Chris Isidore@CNNMoneyJuly 30, 2014: 10:59 AM ET
GM CEO on victims excluded from payout plan
NEW YORK (CNNMoney)
More than 600 victims of crashes involving recalled General Motors cars have gone to federal court seeking compensation from the automaker.
Most of the victims in the case, including 29 people who died, can't receive money from the compensation fund that GM has set up to pay victims of the recall of 2.6 million vehicles with faulty ignition switches. That's because their vehicles were not part of that recall.
But GM has recalled more than 26 million other cars and trucks so far this year for a variety of problems, and most of those involve other problems with ignition switches.
"This makes absolutely no sense that the fund is restricted to the first 2.6 million vehicles initially recalled for ignition switch issues," said Robert Hilliard, a Corpus Christi, Texas, personal injury attorney who has been one of the leading attorneys pressing GM on the recall crisis. "GM needs to step up and acknowledge the blood on its hands from all of these recalled cars."
Hilliard said that some of plaintiffs in his suit are eligible for the compensation fund. But they don't believe the formula devised by fund administrator Kenneth Feinberg will fairly compensate them for their injuries.
Those plaintiffs can file a claim with the fund starting this Friday and still proceed with the lawsuit. If they decide to accept the final amount offered to them by the fund, they will have to drop out of the suit at that time. GM has estimated it will pay at least $400 million through the compensation fund, although there is no cap on amount it will pay.
The number of victims covered by Hilliard's suit could grow significantly. All of the victims currently covered in the suit were involved in crashes that took place after the company emerged from bankruptcy in 2009. GM won protection in bankruptcy court against lawsuits for accidents that took place before it emerged from bankruptcy.
While those pre-2009 crash victims are eligible for the compensation fund, GM has not waived its legal protection from lawsuits in those cases.
Hilliard said he has more than 200 other victims involved in pre-2009 crashes who he will seek to add to the federal lawsuit. But he said he needs to file a separate motion to do so because of the legal protections GM received from the bankruptcy court.
GM said it would not comment on the lawsuit. Spokesman Jim Cain said, "We want to do the right thing for the people who were physically injured or lost a loved one as a result of an ignition switch issue in a Cobalt or one the other recalled small cars."