The deal would help clear the way for the company to end its Chapter 11 bankruptcy. It called for the establishment of a trust to pay out claims to injured victims or the families of motorists who were killed by a Takata airbag.
Now, a group of 13 automakers will reportedly contribute $80 million to $130 million to compensate those injured by faulty Takata airbag inflators as part of the deal to resolve the company’s bankruptcy, a U.S. plaintiffs’ attorney told Reuters.
Takata and its U.S. unit, TK Holdings Inc, filed for bankruptcy after it was found that its airbags can explode with too much force, sending shards of metal flying through the passenger cabin. The National Highway Traffic Safety Administration (NHTSA) has called the safety recall the “largest and most complex” in U.S. history. At least 21 deaths and hundreds of injuries have been linked to the faulty airbags.
Compensation likely to fall short
The 13 automakers that will contribute to Takata’s bankruptcy estate include Honda, Ford Motor Co, Toyota Motor Co, General Motors Co, and Volkswagen AG. The companies will have 18 months to opt into the trust, if they agree to compensate drivers in full.
The plan will be presented to a U.S. judge on Friday for approval.
Attorney Joe Rice of Motley Rice, who represents dozens of victims in the bankruptcy, said money from the Justice Department settlement and the bankruptcy will likely fall short of full compensation for those who were injured by the airbags.
However, injured drivers will still be able to sue any of the car manufacturers except for Honda, which has agreed to create a trust to ensure injuries linked to its vehicles will be compensated in full, according to Rice.