Sunday June 28, 02:43 AM
GM, US near agreement on legal claims: report
WASHINGTON (AFP) - The US Treasury Department is close to striking an agreement with struggling automaker General Motors (NYSE: GM - news) to preserve some legal claims against the company, The Washington Post reported.
The deal would allow claims from accident victims and displaced dealers to proceed in state courts even after GM emerges from bankruptcy, the Post said, citing people familiar with the matter.
Talks between the Treasury's auto task force, the automaker and over a dozen state attorney generals have arrived at a "general consensus" that issues with dealers must be resolved and some product liability claims must be preserved, Connecticut Attorney General Richard Blumenthal told the newspaper.
"We're hopeful about reaching an agreement," Blumenthal said, adding that the talks would likely continue through the weekend.
"Most fundamentally, there's a basic principle of fairness... that huge amounts of taxpayer dollars are going into a deal that may deprive those same taxpayers of critical legal rights. How could the United States government participate in a deal that is fundamentally unfair and unjust?"
The Treasury and GM were not immediately available for comment Saturday.
The government's plan would invalidate lawsuits by hundreds of customers with existing claims against the company, estimated at 2.2 billion dollars.
But Blumenthal and others have filed an objection to the measure, the Post said.
Consumer groups have also stepped up their opposition to the plan, stressing differences between the restructuring of Chrysler (Xetra: 710000 - news) and GM, which has benefited from 30 billion dollars in government financing to help it restructure.
GM filed for bankruptcy protection in early June and under a rapid restructuring plan, the US government would become the company's principal shareholder with a 60.8 percent stake. Canada would have 11.7 percent. A United Auto Workers trust fund would hold 17.5 percent.
The exit plan, which is set for a hearing June 30, would create a "new GM" that would buy the main assets of the biggest US auto manufacturer.
Sources familiar with the case have said that GM appeared to be on track for an exit from bankruptcy protection under the new scheme by mid-July.
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