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Smithtown family's GM lawsuit hurt by bankruptcy

More than two years ago, 10-year-old Amanda Dinnigan was a passenger in a GMC Envoy driven by her mother when the car went out of control and struck a tree about 500 yards from their Smithtown home.

Amanda was left a quadriplegic, and her family has sued General Motors, alleging that the vehicle's seat belts were defective. But Amanda's chances of collecting money from GM, which filed for bankruptcy protection last week, are dim, bankruptcy lawyers said Monday.

That is because bankrupt Chrysler has been made free of all ongoing auto accident claims that blame a death or serious injury on a defective part. GM's chief executive Fritz Henderson said last week he expects the automaker will follow Chrysler's lead on the personal-injury issue.

Nationwide, about 11,942 claims were filed against GM in the past five years alleging injury or death, according to Safety Research & Strategies, a liability research firm in Rehobeth, Mass. About 2,624 claims have been filed against Chrysler in the same time period.

"These claims are going to be wiped out," said Sean Kane, the firm's president.

Through their bankruptcies, Chrysler and GM will legally be "new companies," cleared of old injury claims. Those injured become unsecured creditors, unlikely to receive much money, if any, lawyers said.

"In other words, if some part fails under warranty and it doesn't kill or injure you, you're covered," Kane said. "If it kills you or injures you," you won't get any money.

Barry Bressler, a Philadelphia lawyer representing Chrysler and GM creditors, said the carmakers are protected from future injury claims as well. "If you bought a Chrysler or GM car and have an accident six months from now and you end up a quadriplegic, you're out of luck."

In a statement Monday, GM said, "All claimants will have the opportunity to submit their claims and have them resolved as provided by the Bankruptcy Code and other applicable law, both as to amount and priority."

A Chrysler spokesman said the company is "saddened anytime someone is injured in one of our vehicles." A statement added that "Chrysler will take into account all creditors, including those with legal claims against the company."

The government will own 60 percent of Chrysler. But a Treasury Department spokeswoman said in a statement the agency "was not involved" in the decision to eliminate product liability claims. Treasury said Chrysler's decision was "consistent with conventional bankruptcy practices."

But consumer lawyers critical of the bankruptcy plans regarding injury claims say the Chrysler-GM bankruptcies were handled differently than others. Joanne Doroshow, executive director of the Center for Justice & Democracy in Manhattan, said victim compensation funds were established in two cases - in the 1970s when thousands of women were injured after using the contraceptive Dalkon Shield, and again in the 1980s, when people developed mesothelioma based on asbestos-related injuries.

Alan M. Shapey, a Manhattan attorney representing Amanda, said he sued GM in State Supreme Court in Riverhead, after the Feb. 21, 2007 accident. Shapey said a shoulder belt dug into her neck. He said the belt caused a dislocation that severed her spinal cord.

GM declined to comment on the accident.

Amanda's father, Bob Dinnigan, says his daughter's medical costs are roughly $500,000 a year. His union, Ironworkers Local 361, has covered more than $1 million so far, but coverage will soon run out. He will have to apply for Medicaid, but the same level of care might not be provided.

Dinnigan wants to send Amanda to the special Henry Viscardi School in Albertson, where she can receive an education and treatment. But, he said, he is not sure she can withstand the 45-minute commute.

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