GM Ignition Switch Recall: Compensation Chief Kenneth Feinburg Will Unveil More Details About Who Qualifies For Payments

Kenneth R. Feinberg, who General Motors Co. (NYSE:GM) hired to oversee compensation to victims of a faulty ignition switch, is expected to announce in Washington, D.C. on Monday more details of the plan. GM CEO Mary Barra said in House testimony recently that there will be no cap on this company-managed fund and that Feinberg has complete autonomy to decide who qualifies for compensation.

But the news isn’t likely to have an affect on investigations by federal prosecutors and members of Congress who suspect the company of covering up the fatal flaw for years before issuing a recall of 2.6 million older sedans in January, mainly Chevrolet Cobalts and Saturn Ions.

“We have openly acknowledged that the Southern District of New York is looking into activities at General Motors,” GM spokesman Greg Martin told the New York Times in an email statement, adding, “As we have said before, we are fully cooperating and will continue to do so.”

Last week, a federal grand jury subpoenaed the company for documents related to the ignition switch debacle GM says is responsible for 13 deaths and 54 accidents.

Feinberg will offer payments to all injured parties, including drivers, passengers and bystanders in accidents linked to the defective part, even if the company could invoke liability protections from its bankruptcy five years ago, anonymous sources told the industry trade paper Automotive News.

This would resolve a lingering question about whether GM would invoke the "bankruptcy shield" to fight claims in accidents that occurred prior to July 10, 2009, the day the “new” GM emerged from Chapter 11 reorganization, shedding all liability for defective cars made by the “old” GM.

Even with Feinberg’s offer, GM is facing lawsuits such as the one brought forth by Robert C. Hilliard, a lawyer in Corpus Christi, Texas, who's representing 68 families and hundreds of plaintiffs that claim they were injured by the flawed ignition switch. Accident survivors and families of drivers and passengers killed in the GM cars with the ignition switch defect will weight their options -- whether to sue GM in court for damages or agree to Feinberg’s offers.

GM has said it will fight liability claims for loss of resale value of GM cars and that the compensation fund is reserved for physical injuries.