(Updates with closing share price in final paragraph.)
June 11 (Bloomberg) -- Kenneth Feinberg, who is managing General Motors Co.’s fund to compensate victims of ignition flaws linked to at least 13 deaths, said there will be a modest window for filing applications after it starts accepting claims around Aug. 1.
“This program can’t go on forever,” Feinberg told Bloomberg Television today. “If we start by Aug. 1, we want to have a relatively modest timetable to invite claimants to file their claims.”
The program that will determine who is eligible to file a claim will be established by the end of this month, he said.
Feinberg, the lawyer who ran similar funds for victims of the Sept. 11 terrorist attacks and the 2010 BP Plc oil spill, was hired by GM to review compensation for victims following GM’s recall of 2.59 million small cars starting in February. The Detroit-based automaker is facing investigations from Congress and the U.S. Justice Department into why it took more than a decade to call back the cars and last week released its own internal investigation into the matter, which saw 15 people dismissed from the company.
“GM has delegated to me without any ambiguity here, full discretion to evaluate each individual claim, make a determination and pay those claims when eligible,” Feinberg said today.
“By the end of this month, we will establish a compensation program that will define who’s eligible to file a claim with this fund that I’m creating, what the dollars will look like for those who do file; the obligations they will have, the plaintiffs, to prove their claim.”
GM Chief Executive Officer Mary Barra yesterday told reporters GM could have an estimate for the cost of the fund once Feinberg comes up with the program’s protocols. “We won’t know” the final cost “until the actual compensation program has been run but at that point we will make an estimate at the end of the quarter,” Barra said.
Congressional leaders have signaled that Barra, who already faced House and Senate panels in April, will be called to testify again.
The company last month agreed to pay a $35 million fine as part of the Transportation Department’s investigation into how it handled the February recall. GM has also added about 35 investigators as it shows a willingness to take vehicles off the road for a variety of issues.
The company’s total number of vehicles recalled in the U.S. this year has reached almost 14 million, beating its previous record of 10.7 million in 2004, according to U.S. National Highway Traffic Safety Administration figures.
GM’s announced total for all recall costs this year has risen to $1.7 billion and Barra has suggested more recalls may come this quarter as the company takes a closer look at its vehicles.
GM’s stock fell 0.8 percent to $36.12 at the close in New York. The shares have dropped 12 percent this year.