Posted Nov 14th 2012 6:01PM
Toyota Motor Corp. has decided to settle a shareholder class action lawsuit for US$25.5 million. The suit began in early 2010 after reports of accidents attributed to unintended acceleration cropped up. The class action accused Toyota of improperly disclosing "safety and quality issues" related to those reports.
The company later recalled as many as 10 million Toyota and Lexus vehicles in a program estimated to cost US$5 billion. The public relations fallout dragged down the company's stock value by US$30 billion.
The Maryland State Retirement and Pension System, a member of the lawsuit class, had previously estimated a successful trial could have ended with as much as a US$124 million payout.
If you hold Toyota stock, though, don't start spending your winnings just yet. First, common stockholders were disqualified from the suit in 2011. Only claims by investors in Toyota's American Depository Shares are covered. Second, the settlement is only a proposal for now and must still be approved by US District Judge Dale Fischer.
A Toyota spokesman said in a statement that the company is "pleased to be turning the page on this legacy legal issue." The plaintiffs' counsel declined comment.
News Source: Reuters via Automotive News - sub. req.