GM Lawsuits Thrown Out by Bankruptcy
COOPER: The presidents of General Motors and Chrysler were on Capitol Hill today facing senators who grilled them about their plans to slash thousands of car dealerships nationwide. The testimony was testy at times, to say the least. GM followed Chrysler into bankruptcy protection this week. For GM bankruptcy means a clean start. But for families, like the one you're about to meet, it means a door has slammed shut. In legal terms, they are unsecured creditors of GM. In plain language, Amanda Dinnigan is paralyzed from the neck down. Her product liability claim against GM, along with untold others, has hit a wall. Joe Johns tonight is "Keeping Them Honest."</s>JOE JOHNS, CNN CORRESPONDENT (voice-over): Amanda Dinnigan's parents hoist the 10-year-old into and out of bed every day. The little girl now breathes on a respirator.</s>AMANDA DINNIGAN, CAR ACCIDENT SURVIVOR: I led a good life before the accident. All I can remember is waking up in the hospital.</s>JOHNS: Not long ago, after these pictures were taken, Amanda was in a car accident. But what happened to her, the severity of her injuries, her parents say they blame in part on GM. And now because of the GM bankruptcy, they may never get their day in court.</s>ARLENE DINNIGAN, AMANDA'S MOTHER: She was victimized once by what we feel was a defective seat belt. And now she's going to be victimized again by not getting her chance to prove her case.</s>JOHNS: Amanda was paralyzed when the GM SUV her mother was driving slammed into a tree. On impact, Amanda was in a third row seat of the vehicle. Her parents say the seat belt that was supposed to keep her safe severed her spine.</s>ROBERT DINNIGAN, AMANDA'S FATHER: The lap belt is supposed to hang on to you tight, hold you into the seat like this. And then you're supposed to come forward and slow into the crash. What happened is she ran right into it, and the seat belt just went and snapped her neck.</s>JOHNS: The accident left Amanda unable to feel anything below the neck, except for pain.</s>AMANDA DINNIGAN: Ow.</s>JOHNS: The family says her medical care costs hundreds of thousands of dollars a year. They sued General Motors and other companies in the production line, claiming the seat belt had a design flaw; an assertion GM denies. (on camera): But now it may not matter whether GM is responsible. Here's why. Unless a court intervenes, or Congress changes the law, bankruptcy means GM is off the hook for Amanda and anyone else alleging a similar claim that a GM product failed. (voice-over): But GM says all claimants will have the opportunity to submit their claims and have them resolved as provided by the bankruptcy code and other applicable law. Product liability lawsuits cost GM an estimated $2 billion over the last two years. The whole point of bankruptcy is to give the company a fresh start, washing away its liabilities. The family's lawyer is outraged.</s>ALAN SHAPEY, DINNIGAN FAMILY ATTORNEY: It's shocking. And if I had the opportunity, I'd be able to present this case in court. Now what the government has effectively done is more or less denied my client's right to do that.</s>JOHNS (on camera): GM argues it did everything it could to avoid bankruptcy and stay out of this situation. But the bottom line is, you can't collect money from a company that's broke.</s>PETER MORICI, ECONOMIST: The human effect is tragic. But unfortunately this is not a perfect system. Just because you bring a claim in court and get a settlement doesn't mean you're going to get paid.</s>JOHNS (voice-over): Amanda's parents worry about that. But their daughter still dreams the dreams of any young girl.</s>A. DINNIGAN: I want to join the circus.</s>COOPER: The poor girl. Joe, what can the family do? Do they have any options?</s>JOHNS: They can go after other people's money, say dealerships that sold the cars, or the company that made the individual component of the car that's alleged to have been defective. They can also try to force the company to buy insurance to cover the claim. But the Dinnigans and a lot of others are basically asking Congress essentially to bail out the victims of the lawsuits the same way the government bailed out the banks and the automakers -- Anderson.</s>COOPER: All right. Joe, appreciate it. Thanks Joe. When General Motors emerges from bankruptcy, it's going to be a shadow of its former self. At ac360.com you can read a fascinating take on how the once giant automaker lost its way. Up next, a man charged with slaying a U.S. soldier at a recruiting center. Investigators now say he was planning other attacks. What they discovered, coming up. And a sixth state makes same-sex marriage legal. We'll tell you where coming up. We'll be right back.