Volkswagen Class Action Update | June 28, 2016
Proposed Settlement Filed
Proposed settlement filed in Volkswagen class action.
The class plaintiffs, the government and VW filed a proposed settlement agreement in court today. I wanted to provide you with a copy of the proposed settlement agreement which is linked below. What follows is a quick overview of the settlement. I plan to send a more detailed summary in the coming days.
Here is an overall breakdown by the numbers:
- VW has agreed to create a funding pool of $10.033 billion from which funds will be drawn to compensate class members. The funding pool is based on an assumed 100% buyback of all purchased eligible vehicles and 100% lease termination of all eligible vehicles.
- VW will pay $2.7 billion into an EPA fund to fully remediate any environmental effects of excess NOx emissions.
- VW will invest $2.0 billion to create infrastructure for and promote public awareness of zero emission vehicles.
Briefly, eligible owners and lessees can choose one of the following compensation options:
Buyback or Lease Termination Option:
- An eligible owner can sell their vehicle to VW for the base value of the vehicle (based on pre-September 18, 2015 market value) and receive a restitution payment. An eligible lessee can terminate their lease without any penalty for early termination and receive a restitution payment.
The restitution payments are calculated based on the value of the vehicle plus a fixed component. For most owners, this cash payment will range from $5,100 to approximately $10,000 per vehicle.
Approved Emissions Modification Option:
- In the alternative, an eligible owner or lessee can have VW modify the emissions system in their vehicle to reduce NOx emissions free of charge and receive a restitution payment. Please note that the proposed modifications are subject to regulatory approvals.
Each of these options has a lot of details, but these are the basics. I will assess both options and provide you with more details on the intricacies of each option.
At this point, you may be wondering if you have an eligible vehicle. An eligible vehicle is Model Year 2009 through 2015 VW and Audi light duty vehicles equipped with 2.0 liter engines. For a list of affected vehicles please consult the chart on page ten of the settlement agreement.
Additionally, for a list of estimated settlement payments to owners and lessees – specifically, buyback and restitution amounts VW will pay for a given car and model year – please consult Exhibit 6. I am sure this exhibit will be very interesting to all of you. It is toward the end of the linked document.
Please note that potential class members have until September 16, 2016 to opt in or out of the settlement.
For owners of 3.0 cars, a settlement pertaining to you is anticipated in the near future.
In closing, I will direct you to the settlement website for more information (www.VWCourtSettlement.com).
There is the quick overview. More news to come, stay tuned.