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Bankruptcy Court Ensures New GM Will Follow State Lemon Laws

  Norman Taylor & Associates
  July 9, 2009

A revision to the bankruptcy agreement under which a “new GM” will acquire most of the assets of the existing corporation has been amended to ensure that GM consumers will continue to have rights under state lemon laws.

Changes were made to the agreement at the urging of state attorneys general who felt that the agreement as initially written stripped the states of oversight in such maters as product liability and disputes with dealers as well as lemon law claims. The amendments to the agreement came out of legal objections filed by the National Association of Attorneys General with the bankruptcy court.

Concerning lemon law rights, a paragraph in the agreement now reads, “the purchaser has assumed the sellers’ obligations under state ‘lemon law’ statutes, which require a manufacturer to provide a consumer remedy when the manufacturer is unable to conform the vehicle to the warranty.

This is good news for GM car owners. Consumer advocates in many states have battled for years to build up protections to ensure that the warranty the manufacturer issues when you buy a car will be honored. Sweeping those protections aside for the roughly 20% market share that GM still holds would have been a major blow to all those who depend on their cars and rely on lemon laws to assist with these matters.

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