Injuryboard Commentary - Bankruptcy

Borrowers On Credit Watch

Gary Shipman — Thu, 22 Oct 2009 15:28:19 GMT

Knowing when a homeowner is eligible to qualify for another mortgage is important information for them to have before making any decisions. At this point in time, some homeowners see no other option but foreclosure, bankruptcy or considering a short sale of their property. Homeowners seeing this as a last resort- the effect these actions will have on their credit is a huge concern that will unquestionably cause even more problems for them in the future. A homeowner should be aware of all options in this process, including when they’re eligible to qualify for another mortgage. This might change what they see as a last resort.

Originally posted at InjuryBoard by Gary Shipman

Health Insurance Reform-Why We Need It Now

Doug Landau — Tue, 06 Oct 2009 09:53:38 GMT

As a personal injury attorney, I see on a daily basis what health care expenses can do to a family's savings and economic status. Bellow are just a few of the problems in the current system in need of correction:

1. Coverage is currently denied to 36 percent of people who try to purchase health insurance directly from insurance companies in the individual insurance market. People are being terribly discriminated against because of a pre-existing condition or dropped from coverage when they become seriously ill.

2. Every year Americans pay more money for less coverage. Employer sponsored premiums have nearly doubled since 2000, this inflationary rate is almost triple wage increases over the same period.

3. Americans in rural areas are finding health care to be less and less accessible. Higher rates of poverty, mortality, and the lack of medical accessibility in these areas create huge health disparities between urban, suburban, and rural America.

4. Small businesses can't afford to offer insurance to their employees. From 2000 to 2007, the percentage of small businesses offering coverage dropped from 68% to 59%, while large firms held stable.

5. Half of all personal bankruptcies are medical expense related.

6. More than 80% of America's uninsured are WORKING families. without reform projections indicate that these numbers will continue to increase.

Without health care reform we are becoming a sicker, more impoverished country. Our country needs health insurance reform.

Originally posted at InjuryBoard by Doug Landau

General Motors and Chrysler Assume Liability for Pre-Bankruptcy Vehicles

Brett Emison — Wed, 16 Sep 2009 12:47:22 GMT

In a major victory for consumers, both General Motors and Chrysler have agreed to assume liability for all vehicles in accidents or collisions that occurred after their bankruptcies.

Under the original bankruptcy plans, both car makers rejected any liability stemming from their vehicles that were manufactured or sold before the companies entered bankruptcy. The original plan allowed both GM and Chrysler to sell off their "good" assets to the "New GM" and "New Chrysler" while leaving virtually nothing in the "Old" companies for consumers who were injured or killed by defective Chrysler or defective GM vehicles. Under the original plans Chrysler and GM would have repaired the defective vehicles under warranty claims, but if that same defect caused injury, the consumer would get nothing. The companies would have fixed the car, but not the people.

These original plans offered GM and Chrysler de facto immunity for all of the vehicles manufactured before entering bankruptcy. Estimates put 66 million GM vehicles and 33 million Chrysler vehicles on the road at the time of the bankruptcy filings, leaving 100 million ticking time bombs on the road. The original plan effectively shifted the auto companies' tort liability to not only GM and Chrysler customers, but anyone those customers injured in an accident or collision. Very wealthy victims would have been forced to use their own savings, while other victims would have been cared for by taxpayers through Medicaid or Medicare programs.

Langdon & Emison was involved in several organizations fighting for consumers throughout the bankruptcy process. Bob Langdon met with the governors of several states and explained that GM and Chrysler had shifted their liabiliyt for defective cars and trucks to tax payers and to state governments through the Medicaid program, which would be forced to care for injured victims. Kent Emison met personally with U.S. Senators and Representatives to prevent tax payers from subsidizing GM and Chrysler liability through the Medicare system. Their work -- along with the work of countless others -- finally put enough pressure on GM and Chrysler that each car company has finally agreed to accept responsibility for defective and dangerous vehicles designed and manufactured by the "old" car companies.

Unfortunately, consumers with accidents or collisions that occurred before the bankruptcies are left in a state of limbo. The car companies have refused to accept liability for these defects and the injuries they caused. Consumers with claims that arose before or during the bankruptcies continue to be left out. The car makers have made informal suggestions that suggest the consumers may someday be compensated, but this remains unclear.

Langdon & Emison is one of the leading automotive product liability law firms in the country with offices in Chicago, St. Louis and near Kansas City. We try cases across the country and represent seriously injured persons and the families of those killed by defective products or the negligence of others. In addition to auto products liability, our practice areas include general products liability, trucking accidents, railroad crossing accidents, mass tort claims, dangerous drugs and commercial litigation.

Connect with Brett Emison on LinkedIn.

Originally posted at InjuryBoard by Brett Emison

Getting down to the nuts and bolts of health care reform in Michigan

David Mittleman — Sat, 05 Sep 2009 12:34:14 GMT

As media coverage surrounding proposed Health Care legislation fluctuates back and forth from one highly charged emotional issue to another, many Michigan residents are left wondering, how would any of this stuff affect me and my life? How would health care reform shape the economy of my community? What would this do to improve the quality of health care where I live?

The Committe on Energy and Commence has developed district by district profiles to highlight for each and every citizen how this legislation would affect them in a real-life manner. Let's go through it, and you can decide for yourself whether or not you'd like your Congressional Representative to support the bill or not. Some things to consider... if businesses would get tax credits, would that be good for business and jobs? If doctors suddenly start getting paid for services that otherwise would have gone unpaid, will that improve the quality of health care in my community? If men, women, and children can finally get treated when they need it, how will that affect job productivity, community strength, and personal happiness?

Upper Peninsula. You folks in the UP are represented by Bart Stupak in the 1st District. In this beautiful part of Michigan 16,500 small businesses (PDF) could receive a tax credit for providing health care for their employees. 900 families might avoid crippling and demoralizing bankruptcies due to unaffordable health care costs. Health care providers, such as doctors and hospitals, would get $185 million dollars they would have never received for services rendered. Perhaps most importantly, 82,000 uninsured Michigan residents would have access to affordable and quality health care.

Muskegon. You folks along the shores of Lake Michigan are represented by in Pete Hoekstra the 2nd District. This breathtaking part of Michigan (PDF) 14,000 small businesses could receive a tax credit for providing health care for their employees. 12,400 seniors could avoid the donut hole in Medicare Part D. 1,200 families might avoid crippling and demoralizing bankruptcies due to unaffordable health care costs. Health care providers, such as doctors and hospitals, would get $75 million dollars they would have never received for services rendered. Perhaps most importantly, 72,000 uninsured Michigan residents would have access to affordable and quality health care.

Grand Rapids. You folks in the western part of the state are represented by Vern Ehlers in the 3rd District. In this growing area of Michigan 14,300 small businesses could receive a tax credit (PDF) for providing health care for their employees. 9,900 seniors could avoid the donut hole in Medicare Part D. 1,200 families might avoid crippling and demoralizing bankruptcies due to unaffordable health care costs. Health care providers, such as doctors and hospitals, would get $114 million dollars they would have never received for services rendered. Perhaps most importantly, 71,000 uninsured Michigan residents would have access to affordable and quality health care.

Mount Pleasant and Big Rapids. If you live by Central Michigan University of Ferris State Univewrsity, you are represented by Dave Camp in the 4th District. In this expansive area of Michigan 14,800 small businesses could receive a tax credit for providing health care (PDF) for their employees. 10,300 seniors could avoid the donut hole in Medicare Part D. 1,400 families might avoid crippling and demoralizing bankruptcies due to unaffordable health care costs. Health care providers, such as doctors and hospitals, would get $92 million dollars they would have never received for services rendered. Perhaps most importantly, 82,000 uninsured Michigan residents would have access to affordable and quality health care.

Flint. The great folks south of Saginaw Bay are represented by Dale Kilee in the 5th District. In this industrial area of Michigan 11,700 small businesses (PDF) could receive a tax credit for providing health care benefits for their employees. 7,100 seniors could avoid the donut hole in Medicare Part D. 380 families might avoid crippling and demoralizing bankruptcies due to unaffordable health care costs. Health care providers, such as doctors and hospitals, would get $157 million dollars they would have never received for services rendered. Perhaps most importantly, 52,000 uninsured Michigan residents would have access to affordable and quality health care.

Lansing. If you're a Spartan faithful, you are represented by Mike Rogers in the 8th District. The home of the world famous Cadillac CTS is also home to 15,100 small businesses that could receive a tax credit for providing health care benefits for their employees. 7,600 seniors could avoid the donut hole in Medicare Part D. 1,700 families might avoid crippling and demoralizing bankruptcies due to unaffordable health care costs. Health care providers, such as doctors and hospitals, would get $53 million dollars they would have never received for services rendered. Perhaps most importantly, 49,000 uninsured Michigan residents would have access to affordable and quality health care - that's more than two fully packed Breslin Centers cheering on the Green and White.

If you didn't see your district listed, don't worry, you can find all the information on the Committee's website found here.

Originally posted at InjuryBoard by David Mittleman

Chrysler Bankruptcy Update: Car Giant To Accept More Product Liability Claims.

Wayne Parsons — Fri, 28 Aug 2009 18:47:49 GMT

The AP (8/27) reported, "Chrysler Group LLC said Thursday it will accept product liability claims in a broader number of cases than originally planned in its reorganization under bankruptcy protection. The automaker said it will now consider product-related lawsuits from consumers involved in accidents that occurred after Chrysler emerged from bankruptcy protection in June that involve vehicles manufactured by the old company." Joanne Doroshow, "executive director of the Center for Justice and Democracy, said Chrysler had 'responded to pressure from injured victims and consumer groups and we commend them for taking this important step to protect public safety.'"

The Detroit News (8/27, Shepardson) reported that Chrysler senior vice president for external affairs and public policy John Bozzella said, "While Chrysler Group still faces challenges, we are confident today that the future viability of the company will not be threatened if we assume these obligations." Chrysler "noted its approach is now consistent with that taken by General Motors Co. as part of its bankruptcy process, Chrysler said. But Chrysler will not accept liability for lawsuits filed for incidents filed before June 10."

Bloomberg News (8/27, Rosenblatt) reported that as part of the original bankruptcy agreement, Chrysler had "agreed to assume liability only for cars sold by the newly formed company."

The Wall Street Journal (8/27, Linebaugh) and Reuters (8/27, Bailey) also covered the story.

Originally posted at InjuryBoard by Wayne Parsons

Most Bankruptcies Caused By Medical Bills

Jason Knowles — Thu, 30 Jul 2009 13:04:34 GMT

The New York Times recently reported on an interesting bankruptcy study published online on June 4, 2009, in The American Journal of Medicine. According to the study, nearly two out of three bankruptcies arise as the result of medical bills. In 2007, medical problems contributed to 62.1% of all bankruptcies. And between 2001 and 2007, the percentage of all bankruptcies attributable to medical problems rose by 50%.

The data on medical bankruptcy, compiled by researches at Harvard and Ohio University, is based on a survey of 2,314 randomly selected bankruptcy filers during early 2007. Among families who were bankrupted by medical problems, those with private insurance reported average medical bills of $17,749, compared to those who were uninsured, who faced an average of $26,971 in medical costs. Those who had health insurance, but lost it in the course of their illness, reported average medical bills of $22,568.

The Times reported that hospital costs accounted for about half the expenses (48%), followed by prescription drugs (18.6%), doctor’s bills (15.1%) and insurance premiums (4.1%).

Given the current state of the economy, the full scope of the problem is probably even worse today than in 2007. Hopefully, Congress will deal reasonably and wisely with the healthcare issue and reform a broken system.

Originally posted at InjuryBoard by Jason Knowles

New GM Accepts New Product Liability Claims

Greg Webb — Mon, 20 Jul 2009 08:00:00 GMT

In a bid to win court approval for a quick sale from bankruptcy, General Motors Corp. (GM) has agreed to accept liability for future product defects. Additionally, GM stated that it would change the terms of its proposed asset sale to address the objections raised by twenty suppliers and was working to create a “consensual” agreement regarding the future of a joint-venture plant with Toyota. These statements by GM demonstrate how the auto manufacturer and Obama administration officials have worked to counter some of the more controversial issues raised by the company’s bankruptcy filing. A group of nine state attorney generals, for example, voiced opposition to GM’s reorganization because it would have robbed consumers of protection against product defects under state legislation.

By August, under the GM reorganization plan, a new company would be created to buy the company’s best assets out of bankruptcy. This new company would be 60 percent owned by the federal government, 17.5 percent by the United Auto Workers union and 11.7 percent by the Canadian government and the province of Ontario. The consumers who have lawsuits pending against GM have objected to the reorganization plan since those injury and wrongful-death claims would have to be paid from the sale of GM’s most worthless assets. They further claim the automaker’s insurance would only cover product liability claims of up to $35 million per claim. This amount would not cover the claims of almost any of the lawsuits since many of the cases involved “devastating injuries” from alleged automobile defects.

GM has agreed, however, to continue paying “lemon law” claims so consumers would be entitled to a refund or replacement for defective vehicles. GM has also stated that the reorganized company, which will be nationalized with a $50 billion investment from the United States Treasury, will assume liability for future product defect claims as well.

While it is a good thing that GM will be back in business as (the New GM), it is a tragedy that there are thousands of product liability claims, including those for asbestos-related illnesses, that will effectively be kicked to the curb. All claims that existed before the "reorganization" are likely never going to be paid anything close to acual value. All of those that fall into this latter group probably feel as if the justice system has failed them. I am not sure how I could argue differently at the present time.

Originally posted at InjuryBoard by Greg Webb

Sad Day For Americans: Judge Allows GM to Escape Payments to Victims of Injury and Death From Defective GM Cars

Wayne Parsons — Wed, 08 Jul 2009 12:33:23 GMT

If the damage done to the American economy, American workers and all of us by the inept and perhaps crooked management at General Motors (GM), The U.S. Treasury and now a federal judge have told these wealthy idiots that they don't have to pay victims of defective GM cars. That's right. Hundreds of injured and dead Americans who have claims against GM for the defective cars the caused their injury or death. Taxpayers will pay for future medical bills and the loss of life will just be tough luck to the innocent victims. For a President who renewed a sense of Justice in his election, President Obama has sided with corporate giants and demonstrated lack of concern for the injured and the poor in the first six months of his Presidency.

This weekend, a bankruptcy judge approved the sale of GM – leaving those currently injured by defective vehicles in the dust. Last week, the courts provided a partial win for GM vehicle owners by saying those injured in a defective vehicle from the date of sale forward can pursue a claim. However, all pending cases are wiped out by the bankruptcy agreement, including current and future asbestos cases.

See my earlier articles on this subject:

Treasury negotiating on GM's product liability.

Judge approves GM asset sale, clearing way for restructuring.

I am encouraging Members of Congress in the House and Senate to restore the rights of people injured by GM and Chrysler. Because legislation will be the only way to ensure everyone has the right to bring a case against Chrysler or GM, HR 3088, the Jeremy Warriner Consumer Protection Act of 2009 has been introduced in the House of Representatives.

Jeremy Warriner lost his legs when he was in a tragic auto accident. Investigators discovered the plastic brake fluid container was defective, and caused a major explosion. Jeremy would have walked away from the accident had it not been for this defect. This bill will require an automobile manufacturer that the Federal Government has an ownership interest in or that has an outstanding loan from the Federal Government to purchase liability insurance from an insurance company, and I will be working hard to get this bill passed. I will keep bringing you progress updates.

Congress continues to consider health care reform following recess with the Senate HELP Committee trying to complete their mark-up this week. National news focuses on this subject. Next week, the House of Representatives will begin considering health care legislation in three committees.

Originally posted at InjuryBoard by Wayne Parsons

The Numbers Explain Why GM And Chrysler Must Accept Responsibility

Mike Bryant — Wed, 08 Jul 2009 00:24:38 GMT

Presently, Chrysler and GM are working through the bankruptcy process. They are attempting to walk on their liability for past and future injuries they've caused as part of the deal. This can not happen. Recently, the The Safety Research & Strategies report, "Public Safety at Risk: Bankruptcies Leave Legacy of Defects, Injuries and Deaths," easily explained why:

There are 30 million GM and 10 million Chrysler products still on the road
The two companies accounted for 47 percent of all the claims filed against auto manufacturers" between the third quarter of 2003 and the fourth quarter of 2008
Chrysler faced 3,497 death and injury claims. GM faced 15,284.

Using those numbers the report concluded that- More than 3,400 U.S. citizens could be killed or injured in the next 12 months. Is there any question that those people should be protected right now?

This is a responsibility that they should not only be looking into preventing, but should never be able to walk away beforehand. It's time that congress stood up to these corporations and made sure that they face the responsibility that they are subjecting the people who buy their product to.

Originally posted at InjuryBoard by Mike Bryant

Judge approves GM asset sale, clearing way for restructuring.

Wayne Parsons — Mon, 06 Jul 2009 14:29:29 GMT

On the front page of its business section the New York Times (7/6, B1, De La Merced) reports that US Bankruptcy Court Judge Robert E. Gerber "approved a plan by General Motors late on Sunday to sell its best assets to a new, government-backed company, a crucial step for the automaker to restructure and complete its trip through bankruptcy court." Gerber's decision "came after three days of hearings to address the 850 objections to the restructuring plan and after he had received a revised sale order from G.M.'s lawyers. In his 95-page opinion, Judge Gerber wrote that he agreed with G.M.'s main contention: that the asset sale was needed to preserve its business in the face of steep losses and government financing that is scheduled to run out by the end of the week."

The Wall Street Journal (7/6, B1, Spector) adds that Gerber's decision "removes a key hurdle to the auto maker's plan to exit bankruptcy." Gerber "rejected pleas from dissident bondholders and product-liability claimants who objected to GM's plans. The judge said the only alternative to GM's plans would be liquidation, 'a disastrous result for GM's creditors, its employees, the suppliers who depend on GM for their own existence, and the communities in which GM operates. In the event of a liquidation, creditors now trying to increase their incremental recoveries would get nothing.' The ruling paves the way for GM's government-brokered restructuring, in which the auto maker will move its 'good' assets -- including automotive brands Chevrolet, Cadillac, Buick and GMC -- to a new company owned by the U.S. Treasury. The sale approval clears the way for GM to potentially exit bankruptcy in less than two months."

The Detroit News (7/6, Snell, Shepardson) reports that the move could result in a "stunningly swift emergence from Chapter 11 bankruptcy," noting that "once the sale closes, which is not expected before noon on Thursday, the 100-year-old automaker will be majority-owned by the U.S. Treasury Department. The government will have a 60.8 percent stake after providing more than $50 billion in financial aid to keep the iconic American company from liquidating and becoming perhaps the greatest industrial failure in the nation's history."

I have previously reported on objections to GM's plan by state attorney generals:

State AGs challenging GM's liability plan - by Wayne Parsons

The AP (7/6, Fowler) reports that "attorneys for some of GM's bondholders, consumer groups and individuals with lawsuits against the company argued in court for its rejection, saying that their needs were being pushed aside in favor of the interests of GM and the government. It was unclear early Monday if any of those groups planed to appeal Gerber's decision."

Bloomberg News (7/6, Scinta), MarketWatch (7/6), and Reuters (7/6, Chasan, Allen) also report on Gerber's ruling.

Originally posted at InjuryBoard by Wayne Parsons