WASHINGTON – A federal judge in Detroit said on Thursday he plans to name former FBI director Robert Mueller to oversee nearly $1 billion in Takata Corp restitution funds as part of a U.S. Justice Department settlement.
Continue Reading Below
In January, Takata agreed to plead guilty to criminal wrongdoing and to pay $1 billion to resolve a federal investigation into its air bag inflators linked to at least 16 deaths worldwide.
As part of the settlement, Takata agreed to establish two independently administered restitution funds: one for $850 million to compensate automakers for recalls, and a $125 million fund for individuals physically injured by Takata's airbags who have not already reached a settlement.
U.S. District Court Judge George Steeh in February accepted Takata's guilty plea and approved the previously agreed settlement.
With the criminal settlement and penalties set in the United States, where the majority of air bag-related fatalities and injuries have occurred, Takata is expected to continue its search for a buyer or financial backer, a process which has dragged on for a year.
Takata paid the $125 million on March 29 and must pay the $850 million within five days of the "anticipated sale, merger, acquisition, or combination involving a transfer of control of Takata," Steeh wrote.
Continue Reading Below
Mueller, now a partner at a WilmerHale, served as a federal court settlement master in a series of Volkswagen AG
Takata has declared about 100 million inflators defective worldwide and automakers have recalled 46 million Takata air bag inflators in 29 million U.S. vehicles. By 2019, automakers will recall 64 to 69 million U.S. inflators in 42 million vehicles, U.S regulators said in December.
In February, Steeh said automakers could be victims of Takata's decisions to hide evidence for over 15 years that its inflators were defective and still be subject to civil litigation for harm done to individuals.
A person briefed on the matter said this week that resolution might not be reached until late April or May.
Takata has denied investor speculation that it would have to seek some form of bankruptcy protection in the United States or Japan. In February, Steeh and lawyers for the Justice Department alluded to the potential for Takata to collapse if it could not find a buyer.
(Reporting by David Shepardson; Editing by Sandra Maler)