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GM begins talks over faulty switch claims

Feinberg: GM has 'agreed to nothing' on settlements

Feinberg: “There were no settlement talks and GM has agreed to nothing.”

UPDATED: 5/2/2014 6:40 pm ET

NEW YORK -- The attorney hired by General Motors to explore compensating victims of crashes linked to a faulty ignition switch met Friday with a plaintiffs' lawyer to discuss a potential settlement for claims, regardless of when accidents happened.

Plaintiffs' attorney Robert Hilliard, who is representing more than 300 people and families with claims for injuries or deaths stemming from recalled vehicles, said in a statement that attorney Kenneth Feinberg, representing GM, had called the meeting at Feinberg's Washington office.

“The meeting with Hillard was very preliminary,” Feinberg said in an interview with Bloomberg. “There were no settlement talks and GM has agreed to nothing.”

Feinberg said he is gathering compensation proposals and expects to have something to present to GM in a month. He said he met with Hilliard and three of the lawyer’s colleagues.

“There were no discussions of individual cases,” Feinberg said. “We talked concepts.”

Hilliard said no agreement was reached on financial details. The meeting appeared to be intended "to convince me they (GM) were going to do right" by people who were injured or killed as a result of the faulty switch, he said.

That will likely include GM assuming legal responsibility for injuries or deaths from all accidents, regardless of when they occurred, Hilliard said.

The company appears to be nearing a decision on whether such a program will be put in place and what shape it could take, Hilliard said. He said he expected a decision to be announced in "day or weeks, not months."

When GM emerged from bankruptcy in 2009 as "New GM," it largely shed liability for accidents arising prior to its bankruptcy. The company did, however, retain liability for accidents involving older products that happened after the bankruptcy ended.

Hilliard said he did not believe GM would assert that defense against victims of older accidents. Feinberg, he said, "agrees bankruptcy isn't an issue for these injuries and death."

Feinberg, the architect of special victims funds for high-profile disasters like the 9/11 attacks, was retained last month by GM in the wake of its massive recall of over 2.6 million vehicles. The company said his task is to determine whether GM should create a program or special fund to address legal claims for accidents involving the switch.

A spokesman for GM, Greg Martin, said the company has acknowledged its "civic and legal obligations" related to the recall, and said it would be inappropriate to comment until Feinberg's work was finished. On April 24, GM CEO Mary Barra said she expected to receive Feinberg's recommendations within 45 days. Barra has also met personally with some victims' families

While numerous lawsuits have been filed against GM since the recall began in February, plaintiffs have faced an unusual hurdle in the bankruptcy shield.

As GM tries to reassure the public that it will not turn its back on accident victims, it is taking a tougher stance on plaintiffs bringing proposed class actions to recoup monetary losses on recalled vehicles, such as reduced resale value or loss of the use of their cars.

The company has asked the same judge who oversaw its 2009 bankruptcy, Judge Robert Gerber in Manhattan, to declare that those cases can't move forward. It specifically left injury and death cases out of that request.

Lawyers for GM and plaintiffs in those proposed class actions appeared in Gerber's courtroom this morning to begin plotting a course for those proceedings. Gerber encouraged both sides to consider settling to avoid a "monstrous battle."

A lawyer for GM, Arthur Steinberg, told Gerber that such talks could eventually be useful, but he wanted to wait for recommendations from Feinberg before moving forward.

"Let's see where the legal issues lie," Steinberg said.

Reuters and Bloomberg contributed to this report.

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