Judge puts GM ignition-switch lawsuits on ice, for now

By Jessica Dye

NEW YORK (Reuters) - A U.S. bankruptcy judge on Wednesday put on hold dozens of lawsuits accusing General Motors Co of concealing an ignition-switch defect while plaintiffs in those cases appeal an earlier ruling that found their cases were barred.

GM had argued that claims for vehicles pre-dating its 2009 exit from Chapter 11 bankruptcy should be dismissed, following U.S. Bankruptcy Judge Robert Gerber's April 15 ruling that the company was shielded from those claims by the terms of its bankruptcy. Plaintiffs said the cases should be stayed pending a resolution of their appeal.

On Wednesday, Gerber said that it would be procedurally "cumbersome" to dismiss the cases, as GM had requested, in case a higher court overturned his decision. Instead, he said the cases would be "simply stayed for the time being." Gerber said that if his decision was upheld, GM could renew its request.

A lead lawyer for plaintiffs, Steve Berman, said he was pleased with the decision. Although Gerber said his April ruling could be immediately appealed to the 2nd U.S. Circuit Court of Appeals, Berman said plaintiffs planned to first seek review from the district judge in Manhattan who is overseeing more than 200 cases consolidated against GM over the ignition-switch defect and subsequent recalls.

Plaintiffs' claims centre on a faulty ignition switch in some older vehicles that could slip out of position, cutting power to brakes, steering and air bags. Last year, GM recalled 2.6 million vehicles with the switch, and later issued additional recalls for other safety issues.

Some of the cases have been brought by customers who say their vehicles lost value as a result of the recalls, while others have filed lawsuits for injuries or deaths linked to the vehicles. GM also set up an out-of-court fund to compensate victims of the ignition switch.

Plaintiffs are proceeding with cases involving GM cars made after its bankruptcy, which were not affected by the April ruling. Gerber also said plaintiffs could bring claims based solely on the conduct of post-bankruptcy "New GM."

(Reporting by Jessica Dye; Editing by Alexia Garamfalvi)