Crisis handler Kenneth Feinberg hired to guide GM through maze of lawsuits

Kenneth Feinberg’s new mission is to guide General Motors through the minefield of lawsuits and potential criminal charges arising from the ignition switch recalls and learn from missteps in his other high-profile roles, according to legal experts who have followed his performance in previous disasters.
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Many of the Gulf Coast residents seeking reimbursement had no attorneys. Those familiar with the process said Feinberg discouraged them from securing representation. One condition for receiving payment was signing a fairly broad waiver relinquishing the right to sue BP.

“He was really trying to coax people to not join the class-action case,” said Joanne Doroshow, executive director for the New York Law School’s Center for Justice and Democracy. “Some of those people were desperate for some money to survive, but they should not have been forced to sign away their rights on a broad basis.”

Further complicating the GM case is the liability shield that the Obama Auto Task Force granted GM and Chrysler coming out of bankruptcy. With the shield, no one could sue the companies for deaths or injuries in accidents occurring pre-bankruptcy in mid-2009.

It’s unclear how many of the 13 fatalities GM has linked to the defective ignition switches occurred prior to July 2009. GM has not said whether it will use its immunity to void lawsuits arising from crashes before that date.

On its website, Feinberg Rozen touts its leadership in “alternative dispute resolution.” That could be an indication GM will at least consider options other than the immunity the government gave it. But the firm’s value to GM will be in the degree to which it can contain the final legal cost relative to what that bill would be without their efforts.

Even his critics acknowledge Feinberg’s skill and effectiveness.

“He puts himself into extremely difficult situations that most people would not want go near,” Doroshow said. “You have to give him his props.”

So the company is hoping the saintly aura of Feinberg still has some magic, Fordham’s Conk said, adding, “A better view for claimants is that as a lawyer he has an ethical obligation to diligently and competently represent his client GM.”