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ATTORNEY GENERAL HERRING REACHES SETTLEMENT WITH TAKATA'S U.S. SUBSIDIARY OVER DEFECTIVE AIRBAG SYSTEMS
~ Settlement is related to the millions of airbags recalled because they could spray metal shrapnel at drivers when deployed ~
RICHMOND (February 22, 2018) - Attorney General Mark R. Herring announced today a settlement with TK Holdings, Inc., the U.S. subsidiary of Takata Corporation, over allegations that the company concealed serious safety issues in millions of airbag systems that are linked to at least 20 deaths and hundreds of injuries around the world. To date, more than 50 million airbags have been recalled because of the use of a propellant system that could spray metal shrapnel at passengers when deployed. The number of recalled airbags is expected to rise to 65 or 70 million by the end of 2019.
"Companies have a moral and legal obligation to protect their customers from defective products like these incredibly dangerous airbags," said Attorney General Herring. "Just like the Volkswagen emissions scandal showed, we will move as quickly as possible to protect Virginians from defective or unsafe vehicles and will hold manufacturers accountable when they deceive drivers or place them at risk."
Documents filed in court alleged that the company knew its airbags posed a danger because of testing failures and, indeed, TK Holdings, Inc.'s parent company pled guilty to manipulating testing data and submitting false and misleading reports to auto manufacturers. The company knew about several ruptures which occurred as early as 2004, but appropriate action to recall these unsafe airbags did not occur until November 2014. Also despite this knowledge, the company failed to properly notify regulators and the public of the serious danger posed by this defect.
The settlement was designed to help ensure drivers are kept safe, and those injured or harmed are compensated. Under the settlement, TK Holdings agrees to:
- Ensure that driver's defective airbags are replaced as quickly as possible;
- End the use of the faulty propellant unless it is necessary to fulfill recall obligations;
- Pay the settling states $650 million after the company has satisfied the claims of drivers who were injured by the defective airbags and other claims;
- Not advertise its airbag systems in a false, deceptive or misleading way
- Not represent that its airbags are safe unless supported scientific or engineering evidence;
- Not falsify or manipulate testing data, or provide any testing data that the companies know is inaccurate;
- Comply with state and federal law as well as the NHTSA Consent Order and Coordinated Remedy Order.
TK Holdings, Inc. filed a chapter 11 bankruptcy case in June 2017, and its reorganization plan has been confirmed by the United States Bankruptcy Court for the District of Delaware. The Consent Decree and Settlement Agreement has been presented to that court for approval.
In addition to Virginia, the settling states are Alabama, Alaska, Arizona, Arkansas, California, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Washington, and Wisconsin.
Virginians who want to know whether their vehicle may be subject to recall should visit the National Highway Traffic Safety Administration's website dedicated to the Takata airbag recall.
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