A group of auto manufacturers have agreed to pay up to $130 million to compensate personal injury plaintiffs injured by exploding Takata airbags.
By Laurence Banville
A group of thirteen car companies are contributing between $80 and $130 million to compensate victims of Takata airbag explosions, paving the way to settle the Japanese company's bankruptcy case.
Takata Resolves Major Personal Injury LawsuitsJoe Rice, an attorney for dozens of individuals and families who are suing Takata, says the automakers have agreed to help Takata cover the personal injury settlement so that the company can focus its remaining resources on producing replacement airbag inflator devices. At this point, the two largest groups of plaintiffs have now settled their claims against Takata, Insider Care News says. General Motors, Ford and Toyota are among the manufacturers participating in the settlement.
The deal, announced in a Reuters report on February 16, 2018, is expected to resolve the remaining issues in the bankruptcy proceedings of Takata and TK Holdings Inc., Takata's US subsidiary.
Bankruptcy Includes $1.6B Sale Of Corporate HoldingsIf approved, Takata will see a full corporate re-organization, in addition to selling its non-air bag inflator business holdings off to Key Safety Systems, a Chinese electronics corporation. The sale, valued at $1.6 billion, will go to finance a variety of penalties and fines to which Takata agreed in a 2017 plea agreement with the US Department of Justice.
Compensation Trust Fund: $205 to $225 MillionIn part, the plea agreement obligates Takata to establish a $125 million compensation fund for injured victims and families. Notwithstanding unforeseen events, a trust fund worth between $205 and $255 million will be created to provide personal injury and wrongful death compensation.
The company has been given until February 27, 2018 to comply with the plea agreement's requirements, making room for a review of the sale to Key Safety from the Committee on Foreign Investment In The United States.
At Least 22 Dead, Hundreds InjuredWhile many Takata-made airbags have been under recall for nearly four years, millions of dangerous airbags are still on the roads. In the United States, an estimated 37 million vehicles are affected, including models manufactured by no fewer than 19 different car companies. Accelerating the recall effort is a top priority, but it also bankrupted Takata.
Due to the use of an inappropriate propellant, Takata airbag inflators can explode suddenly, sending metal shrapnel shooting through a car's interior. The problem has been linked to at least 22 deaths and hundreds of severe personal injuries.