In re Motors Liquidation Co.

600 B.R. 482
United States Bankruptcy Court, S.D. New York·Decided May 28, 2019·No. Case No. 09-50026 (MG) (Jointly Administered)·Published·Cited by 2 cases

Opinion

MARTIN GLENN, UNITED STATES BANKRUPTCY JUDGE

Celestine and Lawrence Elliott (the "Elliotts") purchased General Motors vehicles in 2006 and 2007. On June 1, 2009, General Motors Corporation ("Old GM") filed for bankruptcy. The Court established November 30, 2009 as the bar date and General Motors LLC ("New GM") emerged from bankruptcy in 2011. Between 2012 and 2014, New GM issued dozens of recalls related to vehicles sold before the bankruptcy filing. Several of those recalls applied to the Elliotts' vehicles, including recalls related to an issue with the ignition switch and an issue with the driver's door module ("DDM").

On January 21, 2019, the Elliotts moved the Court to "lift the bar date" to allow the Elliotts to assert a late class claim based on the DDM defect. ("Motion," ECF Doc. # 14399.) The Wilmington Trust Company, as the General Unsecured Creditors Trust (the "GUC Trust") administrator, objects to the Motion. ("GUC Trust Objection," ECF Doc. # 14417.) General Motors LLC ("New GM") joined the GUC Trust Objection. ("New GM Joinder," ECF Doc. # 14418.)

The Court finds that the Elliotts have failed to satisfy the standard for permitting late claims related to the DDM defect. The Elliotts filed the Motion with respect to the DDM defect almost ten years after the bar date in this case. They argue this delay should be excused because they did not receive proper notice of the bar date. Even if the Court assumes the Elliotts' due process rights were violated, however, *484this would only explain a portion of the Elliotts' delay. The Elliotts should have filed the Motion no later than December 2016. Their counsel attended a hearing on November 16, 2016 during which the Court explained that it was ready to decide whether late claims could be filed and that parties should proceed with filing late claims motions. Despite this, the Elliotts waited until January 21, 2019 to file the Motion. The Court finds that there is no excuse for this significant delay.

It appears the Elliotts believe they preserved their ability to file a late claims motion by filing a joinder to motions to permit the filing of late claims that were filed by other parties in December 2016. ("Elliott Joinder," ECF Doc. # 13811.) The Court disagrees. The motions the Elliotts joined very clearly asserted claims based only on defective ignition switches, side airbags, and power steering, specifically identified by recall numbers. By joining these motions, the Elliotts only preserved their right to file claims based on these same defects. The Court has not yet decided the late claims motion with respect to the owners of vehicles that were the subject of recalls specifically identified in the late claims motion filed by economic loss claimants. The Elliott Joinder may have timely preserved their arguments with respect to those defects, but the determination of that portion of the Elliotts' claim must await the determination of the economic loss plaintiffs' pending motions. The Elliotts' late claims motion did not preserve the Elliotts' right to file a late claim based on the DDM defect, as the Elliotts now seek to do in the Motion.

For these reasons, the Motion is DENIED with respect to the DDM defect.

I. BACKGROUND

The Elliotts purchased a new 2006 Chevrolet Trailblazer at a now-defunct Chevrolet dealership in the District of Columbia in 2006. (Motion at 5.) A year later, they purchased a new 2007 Chevrolet Cobalt at the same dealership. (Id. )

Old GM filed for bankruptcy on June 1, 2009. In Matter of Motors Liquidation Co. , 829 F.3d 135, 145 (2d Cir. 2016) (hereinafter 2016 2nd Cir. Opinion ). On the same day, Old GM filed a motion to sell substantially all of its assets to New GM free and clear of all liens and encumbrances pursuant to 11 U.S.C. § 363. Id. The next day, the Court ordered Old GM to provide notice of the proposed sale order to interested parties and to post publication notice of the same. Id. at 146. On July 5, 2009, the Court issued an order (the "Sale Order") approving the section 363 sale. Id. November 30, 2009 was set as the bar date for any individual or entity to file a proof of claim. Id. The Court ordered Old GM to publish notice of the bar date in the Financial Times, the Wall Street Journal, the New York Times, USA Today, the Detroit Free Press/Detroit News, Le Journal de Montreal, Montreal Gazette, the Globe and Mail, and the National Post at least thirty days prior to the bar date. (ECF Doc. # 4079, at 7.) Old GM filed a Chapter 11 liquidation plan on August 31, 2010, and amended plans on December 8, 2010 and March 29, 2011. 2016 2nd Cir. Opinion , 829 F.3d at 147. When the second amended plan was confirmed on March 29, 2009, Old GM established the GUC Trust to administer the claims against Old GM and Old GM dissolved. Id. at 147-48.

Between 2012 and 2014, New GM issued over 60 recalls relating to various defects in GM vehicles. Id. Several of these recalls applied to the Elliotts' vehicles. With respect to the DDM defect, New GM issued recalls on August 16, 2012, June 13, 2013, and July 2, 2014, (GUC Trust Objection at 10-11 (citing NHTSA Campaign No. 12V406000, 13V-248, and 14V404000).)

*485After the recalls were issued, owners of defective GM vehicles, including the Elliotts, filed lawsuits across the country asserting claims against both Old GM and New GM. On April 1, 2014, the Elliotts filed a four-page letter as a pro se complaint in the Superior Court for the District of Columbia relating to both of their General Motors vehicles. (Motion at 6.) The complaint alleged both ignition switch and non-ignition switch defects in the Elliotts' Cobalt and non-ignition switch defects in the Elliotts' Trailblazer. (Id. at 7.) After retaining counsel, the Elliotts amended their complaint so that it only asserted non-successor liability claims against New GM related to the Cobalt. (Motion at 7 n.4.)

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In re Motors Liquidation Co., 600 B.R. 482 (N.Y. 2019).

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