When the U.S. Senate turned its back on a rescue package for GM, Ford, and Chrysler, it also turned its back on consumers who own American cars
Stamford, CT (PRWEB) December 12, 2008
"When the U.S. Senate turned its back on a rescue package for GM, Ford, and Chrysler, it also turned its back on consumers who own American cars," said Sergei Lemberg (http://www.lemonjustice.com), a former bankruptcy lawyer who now represents consumers in warranty and lemon law cases. "Amid reporting that the Big Three are talking to bankruptcy lawyers, no one is taking into account the impact that bankruptcy would have on existing car warranties and lemon law claims."
Although the Bush Administration has done an apparent about face and may use the Troubled Asset Relief Program (TARP) approved by Congress in October to help automakers, the Treasury Department has already allocated all but $15 billion of the available funds to troubled financial institutions. According to Lemberg, this could spell trouble for consumers.
"The ripple effect of a GM, Ford, or Chrysler bankruptcy would be felt far beyond autoworkers, dealerships, and suppliers," Lemberg said. "If one or more files under Chapter 11 or Chapter 7, car warranties might become worthless, leaving hundreds of thousands of car owners without protection."
Similarly, claims under state lemon laws could also become moot. "When an entity files for bankruptcy, all lawsuits are put on ice," said Lemberg. He noted that it's unlikely that the so-called "police powers" section of the Bankruptcy Code will protect consumers. "Even though it can be argued that lemon laws are intended to police wrongful or unfair conduct by automakers, the exception typically applies only to the government, not to actions by consumers," he said.
Lemberg's conclusion? "While I'm always on the opposing side of the Big Three in lemon law cases, this time the interests of consumers and car manufacturers are aligned," he said. "The U.S. government has to act to ensure that auto warranties remain intact and that consumers can continue to use lemon laws and other warranty laws for relief from defective cars."
About Lemberg & Associates, LLC
The attorneys at Lemberg & Associates, LLC are experts in warranty and lemon law, and practice in New York, Connecticut, New Jersey, Massachusetts, Pennsylvania, Maryland, California, and Washington, D.C. Sergei Lemberg can brief you about the potential effects of automaker bankruptcy on consumers, state Lemon Laws, and other protections afforded car owners.
For more information, contact:
Lemberg & Associates, LLC