A US federal judge was yesterday to consider Takata Corp’s proposed US$1 billion settlement over deadly automotive air bags that have claimed at least 17 lives around the world.
The Tokyo-based company is scheduled to enter a guilty plea in Detroit before US District Judge George Caram Steeh to one count of wire fraud for falsifying data and reports provided to automakers.
Takata last month agreed to pay a US$25 million criminal fine and establish a US$125 million fund to pay victims and a separate US$850 million fund to reimburse automakers for recalls.
Photo: Reuters
Takata and the US Department of Justice last month nominated lawyer Kenneth Feinberg to run the compensation fund as part of the proposed settlement, and Feinberg’s role will be among the items the judge was to weigh yesterday, two people familiar with the situation said.
“I’ll be in the court tomorrow at the request of the US district judge,” Feinberg said on Sunday in an interview. “What happens there is up to the judge.”
He declined further comment.
The appointment of 71-year-old Feinberg would bring to the case a lawyer experienced in administering some of the nation’s highest-profile settlements.
He handled General Motors Co’s ignition switch fund, as well as compensation for victims of the Sept. 11, 2001, terrorist attacks and BP PLC’s 2010 Gulf of Mexico spill.
Takata’s agreement last month to settle the criminal probe removed a hurdle to the air-bag maker’s sale, which the company needs to continue operations and complete the biggest product recall in automotive history.
US prosecutors charged three former Takata executives for their alleged roles.
Takata faces a recall that is expected to cover more than 100 million air bags.
Potential buyers include Autoliv Inc and Key Safety Systems Inc.
The eventual acquirer would have to ensure a stable supply of replacement parts even as uncertainties surround its exposure to future liabilities, including the costs for replacing the air bags.
When the US announced the guilty plea last month, Takata said it would establish a US$125 million restitution fund for “individuals who suffered or will suffer personal injury caused by the malfunction of a Takata air bag inflator, and who have not already resolved their claims.”
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