Judge Brendan Shannon of the U.S. Bankruptcy Court for the District of Delaware has approved a bankruptcy plan carving out a trust for personal injury claimants as well as a second channeling agreement allowing for future claims. Working on behalf of current and potential future personal injury and wrongful death victims of defective Takata airbags, Motley Rice LLC, one of the nation’s largest plaintiffs’ law firms, helped negotiate the resolutions and spoke out in favor of both plans during an approval hearing Feb. 16, 2018. The airbags, at the center of the largest automobile recall in history, have been linked to at least 22 deaths and 180 injuries worldwide.
One resolution is with TK Holdings, Inc., the U.S. division of Takata, and the other with Original Equipment Manufacturer (OEM), Honda North America, Inc. The resolutions will be available to all U.S. personal injury and wrongful death victims.
“Our firm has seen firsthand too many horrific, life-changing injuries as a result of these defective Takata airbags and, tragically, families who have lost loved ones,” said Motley Rice co-founder Joe Rice. “Like dynamite in your car, these airbags should have never been installed in millions of vehicles. Once they were known to be deadly, they should have been more swiftly recalled, and the driving public notified. Sadly, that did not happen, so we are pleased that Judge Shannon has approved what we believe to be fair options for current and future victims of Takata airbags that provide swift resolution and allow victims to try to move on with their lives.”
Takata Bankruptcy: Resolution for Personal Injury and Wrongful Death Victims
“The once profitable and financially sound Takata has suffered severe economic losses because of its defective airbags, filing for bankruptcy and Chapter 11 protection in June 2017. The proposed sale to Key Safety Systems left minimal compensation for victims killed or injured by Takata airbags. In an effort to protect current and future claimants, my firm found it in the best interest of these claimants to aggressively pursue efforts to fund a trust using Takata assets under the bankruptcy plan,” said Rice.
Plaintiffs have the option to opt out and file litigation through the tort system if they feel their claim is not fair.
The estimated value of the trust is $90 million to $137 million. This amount may increase, but will not decrease. Once the trust is open, it would begin to accept claims in approximately mid-2018.
Mediator Eric D. Green would oversee claims as the Trustee, and Roger Frankel of Frankel Wyron LLP will serve as the Court appointed Future Claims Representative of TK Holdings, et al.
Settlement with Honda
“Because the OEMs installed these defective airbags in their vehicles, they may also be legally responsible,” said Rice. “To that end, we recommended a settlement with Honda through a Channeling Injunction to protect future claimants so they will not be burdened by Honda’s available defenses. Honda has the most U.S. vehicles on the road, and there have been more than 200 reported injuries or deaths involving defective Takata airbags in Honda cars to date.”
“Our goal is to protect current and future victims, and this settlement through a Channeling Injunction, which at this time only involves Honda, is the best option to do so,” said Rice. “The settlement provides victims with security and assures future victims get similar values without concern about risks that can come to play, or excessive delays that can sometimes occur in the civil justice system and the appeals that often come after a trial verdict.”
Through this settlement, Honda will pay 100 percent of compensatory damages without any credit for fault placed on Takata, third parties or the victims. Honda also has agreed to pay, regardless of the age of the car or the expiration of a statute of limitations. Risks to the victim are effectively mitigated, reducing stress and allowing them to focus on their lives and injuries. For example, defenses that may be used in the tort system by an OEM, such as not acting on a recall letter or driving violations, are waived under this settlement. Additionally, the settlement values have punitive damages built in based on known, prior settlement values in other cases.
As with any settlement, the plaintiff has the right to opt out and go through the tort system if they are not satisfied with the proposed value of their claim.
Millions of vehicles have been recalled for defective Takata airbags. To see if your vehicle is recalled, visit www.safercar.gov and enter your VIN.
Learn more about recalled and defective Takata airbags.