U.S. senators ask Justice Department to intervene in GM litigation

GM CEO Mary Barra testified before a Senate subcommittee on GM's recall crisis. Photo credit: BLOOMBERG

WASHINGTON (Reuters) -- A group of U.S. senators today urged the Department of Justice to oppose any efforts by General Motors Co. to skirt financial responsibility related to the company's failure to promptly recall vehicles with ignition switch problems linked to 13 deaths.

The five Democratic senators, in a letter to Attorney General Eric Holder, said the Justice Department should "intervene in pending civil actions to oppose any action by GM to deny responsibility for damages."

The senators were referring to the possibility that GM could use bankruptcy protection to avoid paying damages authorized by pending lawsuits. The company was reorganized in bankruptcy proceedings, with the "new" GM not responsible for the "old," pre-2009 GM liabilities.

The senators, echoing earlier calls, also called on Holder to force GM to establish a victims' compensation fund and to ensure that consumers are adequately warned about driving cars that could have faulty ignition switches.

Those switches can malfunction, causing engines to stall and stopping safety features like airbags, power brakes and power steering from operating as intended.

GM already has recalled 2.6 million Chevrolet Cobalts, Saturn Ions and other small, relatively inexpensive cars manufactured over the past decade.

The letter was signed by senators Richard Blumenthal of Connecticut, Edward Markey of Massachusetts, Bob Casey of Pennsylvania, Mazie Hirono of Hawaii and Barbara Boxer of California.

"We write to request your immediate intervention and assistance on behalf of victims of severe damage -- financial harm, physical injury, and death -- resulting from serious ignition switch defects in General Motors ('GM') cars," the senators wrote.

Noting the role Washington played in rescuing GM by becoming a major shareholder in the ailing company, the senators added, "We believe the federal government has a moral, if not legal, obligation to take all necessary steps to protect innocent consumers."

On April 1, during testimony to a House Energy and Commerce panel investigating GM, company CEO Mary Barra announced that it had hired Kenneth Feinberg, a well-known consultant, to examine what steps, if any, GM might take to help families of crash victims.

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