Add Crash Victims to the List of People Obama Screwed Over in His Rush to Create Government Motors
Orwellian, and yet, Kafkaesque at the same time. At this point in time, I’m beginning to wonder if Orwell and Kafka didn’t grow some sort of freakish love child in the laboratory and name him Barack Obama:
Car Bailouts Left Behind Crash Victims
By MIKE SPECTOR – WSJ
Vicki Denton died several years ago after the airbag in her 1998 Dodge Caravan minivan failed to deploy during a head-on collision in the Georgia mountains. In 2009, a jury found Chrysler responsible for her death because of a manufacturing defect, awarding her surviving son and other relatives $2.2 million.
The family was near collecting those damages on the eve of Chrysler’s government-brokered bankruptcy. Now, two years removed from a $12.5 billion bailout, Chrysler Group LLC still hasn’t paid the damages, and doesn’t have to.
The reason: The company’s restructuring allowed it to wash away legal responsibility for car-accident victims who had won damages or had pending lawsuits before its bankruptcy filing. The same holds true for General Motors Co., which discarded the liabilities as part of its own $50 billion bailout and restructuring.
In rescuing the car makers, the U.S. government […] created a wide universe of relative winners and losers. The U.S. Treasury received large ownerships stakes in the restructured auto makers, as did union retiree trusts. Chrysler’s banks got some, not all, of their loans repaid in cash, and GM’s lenders were fully repaid. On the other side, thousands of dealers, asbestos victims and other creditors received little to no recompense.
Among the creditors who suffered most, car-accident victims represent a distinct mold. Unlike banks and bondholders, this group didn’t choose to extend credit to the auto makers. As consumers, they became creditors only after suffering injuries in vehicles they purchased.
“This was not a normal case. The government was deciding who was going to be taken care of and who was not,” said David Skeel, a University of Pennsylvania law school professor and bankruptcy expert who has testified before Congress on the auto bailouts.
Among the largest unpaid awards is nearly $23 million owed to the parents of Joshua Flax, an eight-month-old infant who died when the Dodge Caravan minivan he was riding in was rear-ended.
Mr. Sparkman, Joshua’s grandfather, still seethes that the auto maker hasn’t paid his daughter’s damages.
“We did what we were supposed to do, we went through the legal system,” he says. “This is a real person. It’s not just something to write off on the ledger book.”
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