Takata Airbags $850 Million Restitution Fund Allocation Program Launched
The Special Master in the United States v. Takata Corporation criminal case in the U.S. District Court of the Eastern District of Michigan launched the $850 million restitution fund for vehicle manufacturers that purchased airbags with PSAN Inflators from Takata Corp. and its subsidiaries. The Special Master, Eric D. Green, a Boston law professor and mediator, stated that he is sending notice to more than 50 auto manufacturers around the world who purchased the Takata airbags that are subject to widespread recall programs, and who may be eligible for compensation from the OEM Restitution Fund set up as part of Takata Corp.’s plea agreement in February of this year.
According to the Special Master’s notice sent to the auto manufacturers, Takata pled guilty on Feb. 27 to one count of wire fraud and the Court entered the Restitution Order requiring Takata to, among other things, pay restitution in the amount of $481,848,850 to the OEMs who were defrauded in connection with their purchase of airbags with PSAN Inflators and additional restitution in the amount of $368,151,150 to all OEMs who purchased airbags with PSAN Inflators from Takata for a total amount of $850 million in restitution to OEMs.
A significant majority of Takata’s OEM customers, which collectively purchased approximately 90 percent of the PSAN Inflators sold by Takata as of Dec. 31, 2016, agreed upon a Proposed Allocation and presented it to the Special Master for consideration. Following a formal presentation on the proposal for allocation of the OEM Restitution Fund, several discussions with the Consenting OEMs about the proposal, and an independent review by the Special Master of the proposal, the Special Master provisionally determined that the Proposed Allocation provides for an equitable distribution of the OEM Restitution Fund. However, to ensure that all eligible OEMs have a chance to be heard, an opportunity is being provided for them to object to the proposed allocation or comment in writing to the special master prior to final determination by the special master and submission to the court for final approval.
The special master also is in charge of a separate $125 million individual restitution fund designed for persons who suffer personal injury or wrongful death as the result of a Takata airbag inflator defect. Green stated that the proposed allocation of the Individual Restitution fund will be announced at a later date.