BOSTON, Dec. 4, 2017 /PRNewswire/ -- The Special Master in the United States v. Takata Corporation criminal case in the United States District Court of the Eastern District of Michigan announced today that he launched, on Friday, December 1, the $850 million restitution fund for automobile manufacturers (OEMs) that purchased airbags with PSAN Inflators from Takata Corporation 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 February 27, 2017 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 (collectively, the "OEM Restitution Fund"), for a total amount of $850 million in restitution to OEMs.
On July 31, 2017, the Court appointed Professor Eric D. Green as Special Master to oversee the OEM Restitution Fund. His responsibilities include developing a formula or formulas, subject to Court approval, for distributing funds to eligible claimants, making determinations regarding allowed claims, and making a recommendation to the Court regarding allocation of funds from the OEM Restitution Fund.
A significant majority of Takata's OEM customers (the "Consenting OEMs"), which collectively purchased approximately 90% of the PSAN Inflators sold by Takata as of December 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 is also 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. Professor Green stated that the proposed allocation of the Individual Restitution fund will be announced at a later date.
The Proposed OEM Restitution Fund Allocation
Under the Proposed Allocation, the restitution monies directed to the OEMs will be combined into a single global fund. All OEMs that purchased PSAN Inflators, regardless of jurisdiction of sale, will be eligible to participate in the combined fund without the need for determining whether a particular OEM was defrauded by Takata. Each OEM's allocation will be determined by the percentage of all PSAN Inflators sold by Takata globally that was purchased by that OEM as of December 31, 2016. The Special Master has independently analyzed the verified third-party Takata PSAN Inflator sales data utilized to determine the percentage for each OEM and determined it reliable.
The Proposed Allocation governing the distribution of the OEM Restitution Fund is set forth in the Direct Notice that was mailed electronically or otherwise to all identified OEMs that are eligible to participate in the OEM Restitution Fund. A copy of the Direct Notice and the Proposed Allocation schedule can be found and accessed on the Special Master's website, www.takataspecialmaster.com.
Any remaining funds attributable to checks which are not cashed or to wire transfers that cannot be completed will be redistributed by the Special Master pro rata to all participating OEMs.
To receive an allocation from the OEM Restitution Fund, each eligible OEM will be required to provide a release in favor of the Special Master and his professionals, advisors and agents.
How an Eligible OEM Auto Manufacturer Can Object to the Proposed Allocation Plan
If an eligible OEM auto manufacturer disagrees with the Proposed Allocation, it can comment on the plan or object. Any comments and objections must be in writing and received by the Special Master on or before December 20, 2017 at 5:00 p.m. EST. Objections can be emailed to [email protected]. If an auto manufacturer does not submit a timely objection, it will be deemed by the Special Master to have accepted and consented to the Proposed Allocation. For additional details on how to properly file an objection, visit the Special Master's website, www.takataspecialmaster.com or call the toll-free number below.
Next Steps & Questions
Following his review of any objections, the Special Master anticipates that he will provide the final Proposed Allocation for the OEM Restitution Fund to the Court for approval in January 2018.
SOURCE Takata Special Master