DETROIT -- A federal judge on Monday will consider Takata Corp.’s proposed $1 billion settlement over deadly automotive airbags that have claimed at least 17 lives around the world.
The Tokyo-based company is scheduled to enter a guilty plea in Detroit before U.S. District Judge George Caram Steeh to one count of wire fraud for falsifying data and reports provided to automakers. Takata agreed last month to pay a $25 million criminal fine and establish a $125 million fund to pay victims and a separate $850 million fund to reimburse automakers for recalls.
Takata and the U.S. Justice Department nominated lawyer Kenneth Feinberg to run the compensation fund as part of the proposed settlement in January, and Feinberg’s role will be among the items the judge weighs on Monday, two people familiar with the situation said.
“I’ll be in the court tomorrow at the request of the U.S. district judge,” Feinberg said 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' 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 spokesman Jared Levy declined to comment, as did a spokesman for the Justice Department.
Takata’s agreement last month to settle the criminal probe removed a hurdle to the airbag maker’s sale, which the company needs to continue operations and complete the biggest product recall in automotive history. The payment includes $25 million to the U.S. and $975 million to compensate carmakers and people who were injured, according to court papers. U.S. prosecutors charged three former Takata executives for their alleged roles.
Takata faces a recall that is expected to cover more than 100 million airbags. Potential buyers include Autoliv Inc. and Key Safety Systems Inc.
Key Safety has emerged as the leading contender, a source with knowledge of the bidding told Crain's Detroit Business last week. Crain's is an affiliate of Automotive News.
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 airbags.
When the U.S. announced the guilty plea last month, Takata said it would establish a $125 million restitution fund for “individuals who suffered or will suffer personal injury caused by the malfunction of a Takata airbag inflator, and who have not already resolved their claims.”
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.