General Motors Company Appeases Recall-Scandal Victims But Still Faces Two Big Hurdles [General Motors Company(NYSE:GM)]

gmgeneralmotorsGeneral Motors Company(NYSE:GM) has taken one more step toward quelling the controversy over defective ignition switches in millions of cars, unveiling an open-ended plan to compensate victims without forcing them to sue in court. But the automaker still faces two big hurdles as it moves through a long checklist of items needed to restore its reputation among consumers and reassure shareholders.

The victim-payout plan, developed by independent compensation expert Kenneth Feinberg, will entail payments as high as eight figures for victims killed or injured in defective GM vehicles, or their families. Payouts will vary by age and other factors, and account for things such as lost income and whether a victim had a spouse or children. GM will consider making deals even if victims were intoxicated or driving dangerously, provided the crash can be linked with the ignition problem.

Those who accept a payout will forfeit the right to sue GM, but they’ll also get a sizable check in a matter of months rather than rolling the dice on a court case that could take years. And they’ll be able to know the compensation amount before deciding to accept it, so nobody will have to gamble on a blind choice.

There are still many unknowns about Feinberg’s plan. You can see the full “Breakout” segment below.

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