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AL AG Appeals GM's Bankruptcy Denying AL WC Obligations

01 Jul, 2009 WorkersCompensation.com

                               
Montgomery, AL (CompNewsNetwork) - Attorney General Troy King filed an appeal with the United States Department of the Treasury today seeking to require General Motors, Inc. to honor its Alabama Workers' Compensation obligations. The proposed structuring of the GM bankruptcy agreement provides a continuation in the payment of General Motors' obligations in twenty-two other states, but singles out Alabama, Georgia, New Jersey, and Oklahoma to receive no further compensation.

There are currently forty-three Alabamians receiving workers' compensation from General Motors. One group of eight employees injured between 1983 and 1989 are covered by a bond with a $1 million cap. According to figures provided by the Alabama Department of Industrial Relations, the bond will be exhausted in less than 12 years and perhaps even sooner if additional medical costs are incurred. Thirty-four employees injured after 1989 are covered by an Alabama Workman's Compensation self-insurance guaranty fund with a cap of about $8.9 million with respect to General Motors. According to DIR the guaranty fund will be exhausted in approximately 22 years and possibly sooner.

Additionally, one employee who was injured prior to 1983 is not protected by a bond or the guaranty fund and would receive no compensation under the General Motors plan.

On June 1, 2009, General Motors informed the Alabama Department of Industrial Relations of their intent not to honor their workers' compensation obligations in Alabama. Although DIR notified Governor Riley's office of this plan, the Attorney General's Office was not made aware of General Motors' intentions until June 25, 2009, during a conference call with staff from other Attorneys General Offices regarding consumer protection, lemon law, and warranty issues related to the General Motors bankruptcy.

Upon learning of the plan, the Attorney General's Office began immediate preparation to protest and appeal the provisions that unfairly single out and discriminate against Alabamians.

In his complaint, filed today, Attorney General King stated, "Allowing General Motors to discharge its financial problems onto states like Alabama compounds the fiscal irresponsibility that created this crisis in the first place, and shifts responsibility for the bailout to those who bear no responsibility for creating it – the people of my state."

Attorney General King warned the Treasury Department that the proposed discontinuance of General Motors' obligations to the State of Alabama "sets a dangerous precedent that threatens the solvency of the Guaranty Fund and jeopardizes the claims of many Alabamians who have worked and who now receive workers' compensation benefits unrelated to General Motors." 

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