Previously Ecstatic Saturn Customers Forced to Sue New GM
On August 26, 2009, LakinChapman, LLC filed a complaint against the new General Motors Company, f/k/a New General Motors Company, Inc., on behalf of seven Saturn owners who previously had served as class representatives in a class action against the old GM in the United States District Court for the Eastern District of California.
In October of 2007, these Saturn owners sued the old GM for the premature failure of VTi transmissions in certain vehicles. The transmission failures often left the vehicles inoperable, resulting in costly repairs often exceeding $5,000. Approximately 150,000 people and businesses own or have owned the affected Saturn vehicles.
On April 14, 2009, the federal judge granted final approval of a nationwide class-action settlement involving the old GM. The settlement provided as much as 100% reimbursement for the cost of VTi transmission repairs and replacements and certain related expenses. The response to the settlement was overwhelmingly positive, and Saturn customers were overjoyed with the result. "The settlement with Old GM offered more relief to class members, in terms of dollar per person, than any other consumer class action I'm aware of," said Rob Schmieder, head of the complex litigation department at LakinChapman, which also represented the class in the previous action.
As one Hurricane Katrina survivor put it, "At the time I needed to pay to replace the VTi transmission in my 2004 Saturn Vue, I was just getting my head above water from the financial status I was in from Hurrican Katrina. Once I was told it would cost me over $4,500 to replace the transmission, I felt financially drained and emotionally spent. There were times I would just cry about the financial and emotional distress I was under due to money needed to replace the transmission. The settlement provides great financial relief and I am ecstatic about the settlement."
Then GM filed for bankruptcy on June 1, 2009. The new complaint asks the Court of Chancery of the State of Delaware, GM's state of incorporation, to declare that new GM assumed the responsibilities of the old GM for the Saturn VTi class action settlement.
According to the new lawsuit, new GM agreed to assume responsibility for the Saturn VTi class action settlement in connection with the bankruptcy purchase, though new GM has not yet fulfilled all of GM's obligations under the settlement. According to Rob Schmieder, "If new GM even argues that it did not assume responsibility to fulfill the Saturn VTi settlement, then new GM must assume that it will lose 150,000 loyal Saturn customers."
On July 5, 2009, the bankruptcy court approved the sale of certain assets and liabilities to new GM. Old GM and new GM completed the sale on July 9, 2009. Penske has announced that it intends to purchase Saturn from new GM sometime this quarter.
Immediately after the bankruptcy sale, ex-GM CEO Rick Wagoner received a lucrative severance package: an $8.15 million cash payment, a life insurance policy with a cash value of $2.57 million, and a pension worth $74,030 every year for the rest of his life.
"What great news for Mr. Wagoner," said Rob Schmieder. "But why hasn't new GM fulfilled all of its responsibilities to its customers? The United States government has invested billions of dollars, new GM agreed to assume this obligation, and its customers are supposed to be the lifeblood of GM's business."
For more about the adversary case against New GM, please click here.
Those seeking more information may contact this firm at saturnvti.classaction@lakinchapman.com, or call (800) 851-5523. You may also visit this website, http://www.lakinchapman.com/, for updates.
