If you follow the auto-insurance space at all you have likely heard of the Takata airbag scandal. Faulty airbags in thousands of cars have been linked to at least 22 deaths that could have been avoided had the airbags been up to code. Instead, Takata has been forced to recall thousands of vehicles and has been embroiled in many lawsuits for several years.
The Takata airbags were found to erupt with too much force, causing metal fragments to spray inside the car, acting as shrapnel which proved lethal to 22 different people.
All this seems to be finally coming to an end as 44 states have reached a settlement with TK Holdings Inc., who is in the midst of their bankruptcy reorganization proceedings. In total, the company was forced to settle for a total of $650 million. However, according to a statement by South Carolina Attorney General Alan Wilson, because Takata does not have the money to pay everyone the states “…agreed not to collect this civil penalty in order to maximize the recovery available to consumers who were the victims.”.
As part of the settlement Takata agreed to “…not represent that its airbags are safe unless supported by competent and reliable scientific or engineering evidence” and “not falsify or manipulate testing data, or provide any testing data that the companies know is inaccurate.”.
For context, Takata plead in a U.S. federal court as part of a $1 billion settlement that included compensation funds for the victims. As a result, TK Holdings Inc. filed for bankruptcy last year in the wake of the recalls. As part of their bankruptcy filings Taka has agreed to pay between $80 and $130 million to help those compensated by those injured by the faulty airbags.
According to the company they have recalled, or plan to recall, roughly 125 million airbag inflators by 2019. More than 60 million of those being recalled can be found in the United States.