Federal authorities nascent investigation into General Motors is looking in part into whether the automaker committed bankruptcy fraud by not disclosing defects that could lead to expensive future liabilities, a person briefed on the inquiry said on Friday.
The question is whether G.M. knew about the defect a faulty ignition switch when it filed for bankruptcy in 2009, and failed to fully disclose the problem, while realizing that it could lead to a cascade of liability claims.
While it has been known that the Justice Department was investigating G.M., the interest in the bankruptcy filing is the first indication of what direction the inquiry may take. READ MORE
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