Engine Grinding Noise problems of the 2004 Porsche 911

Traveling at a speed of 30 miles per hour at a low rpm, I heard a loud grinding noise underneath the car. Initially I thought road debris was caught underneath the car and I was dragging it along while driving. I quickly turned the car to the right off the road and turned the motor off. Underneath the vehicle I noticed all of the engine's oil spewing out from the bottom of the engine. I contacted my insurance company and arranged for a tow vehicle. I thought an object struck the undercarriage of my car. The car was inspected by my insurance company and determined to be a complete engine failure. No evidence of a road hazard perforating the engine was seen. Since I filed this letter I have learned that my engine suffered an intermediate shaft failure. This is a defect in the m96 Porsche engines (1999-2009). This defect occurs in water cooled Porsche engines. Porsche motor company denies responsibility in these vehicles but recognizes that engine failure do occur. I have accurate records with the cost of the repair. How can an automobile company recognize that a defect exists but will not issue or be responsible for repairs? thank you for your help. Updated 09/12/11.