Volkswagen AG will also pay up to $1.2 billion to resolve claims brought by more than 650 franchise dealerships claiming the automaker’s diesel emissions scandal hurt the value of their businesses. U.S. District Judge Charles R. Breyer has given preliminary approval to the settlement. The dealers said the terms were fair and reasonable and were reached after extensive negotiations between the parties.
Under terms of the settlement, Volkswagen will pay up to $1.21 billion to 652 U.S. dealerships that were Volkswagen-branded franchise dealers as of Sept. 18, 2015. The average payout will be $1.85 million. The settlement also provides additional benefits to dealers, including buybacks of affected vehicles that can’t be put into emissions compliance, under the same terms afforded to car owners as part of VW’s tentative $14.7 billion consumer settlement. That settlement, preliminarily approved in July, includes $2.7 billion for environmental remediation and $2 billion to build zero-emission vehicle infrastructure. The motion filed by the dealers states:
This recovery to the franchise dealer class is outstanding, particularly given the immediate need for cooperation among Volkswagen and its franchise dealers to effectuate the terms of the $10 billion-plus consumer class action settlement that is presently pending approval before this court. Without any obvious deficiencies, the settlement agreement readily meets the standards for preliminary approval.
In addition, lawyers for the dealers said there will be no claims process, as dealerships that do not opt out of the settlement will automatically receive a cash payment based on a formula of 71 times the monthly support payment VW made to dealers in November 2015.
As part of the settlement, VW has agreed to pay attorneys’ fees and expenses separately from the $1.2 billion settlement amount. The dealers are represented by the entire Plaintiff’s Steering Committee appointed by Judge Charles Breyer.
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