Toyobo Co., Ltd. has reached an agreement that settles the two cases of action for damages filed with the U.S. District Court for the District of Columbia by the U.S. Justice Department.
Toyobo will pay the Justice Department a settlement of US$66 million.
The Justice Department, which purchased and awarded funds for the purchase of bullet resistant vests using Toyobo’s Zylon fibers, filed the two cases for damages against Toyobo and its U.S. subsidiary, Toyobo America, Inc. (present company’s name: Toyobo U.S.A. Inc.) in June 2005 and June 2007.
The Department alleged that Toyobo knew the strength of Zylon fibers sold to the bullet resistant vest makers would degrade quickly under certain environment, but the maker did not disclose such facts or made misleading disclosures.
Throughout the proceedings of these lawsuits, Toyobo denied the allegations, and argued that Toyobo was not at fault. Indeed, every Zylon vest at issue passed the National Institute of Justice’s performance standards for ballistic vests. However, having taken into consideration the cost to continue with these actions, the uncertainty of the jury verdict, and the potential of further delays because of any appeals of any verdict, and after the consultation with its lawyers, Toyobo determined that it would be appropriate to enter into this settlement agreement.
In the settlement, Toyobo and Toyobo America deny each and every allegation and do not admit any legal liability.
The Justice Department will make no other claims in these cases against Toyobo and Toyobo America.
A stipulation of dismissal with prejudice will be filed in both cases immediately after Toyobo’s payment of the settlement amount.
Toyobo is currently investigating the impact this may have on its business performance in the current business year.
These were the last lawsuits against Toyobo or Toyobo America in regard to the above-mentioned bullet resistant vests.