Settlement Agreements and Consent Decrees -- 2016



Elliott v. General Motors LLC   (2nd Circuit)

Validity of bankruptcy sale of assets "free and clear"

The NAM filed an amicus brief urging the U.S. Court of Appeals for the Second Circuit to review an adverse bankruptcy ruling, which held that the new General Motors (GM) may be responsible for claims from the old GM if the claimants did not receive adequate notice of the sale order in the bankruptcy proceeding. This litigation queries whether the new GM is still responsible, five years later, for accident claims and economic loss claims arising from an ignition switch defect. The bankruptcy ruling undermines the price companies reorganized in bankruptcy can obtain when selling their assets and discourages potential buyers from purchasing the assets of such companies. The NAM’s brief argued that the ruling undermines the “free and clear nature” of the bankruptcy code and imposed liability on a good faith purchaser for the debtor’s violations. Unfortunately, the Second Circuit held that the new GM may be responsible for claims that did not receive adequate notice of the sale order in the bankruptcy proceeding.


Related Documents:
NAM amicus brief  (August 10, 2016)