Dana Corp. has agreed to pay 7,500 personal injury claimants a total of $2 million to resolve their lawsuits stemming from asbestos-laden gaskets produced by the auto-parts supplier.
In papers filed Friday with the U.S. Bankruptcy Court in Manhattan, Dana called the settlement a "reasonable and expedient way" to resolve the claims without litigation.
A court hearing on the proposed settlement is scheduled for Nov. 15.
Dana, which sought Chapter 11 bankruptcy protection in March 2006, makes axles, driveshafts and other parts. The Toledo, Ohio-based company is trying to exit bankruptcy protection under a reorganization plan that calls for unsecured creditors to recover between 72 percent and 86 percent on their claims.
Dana has said asbestos-related personal-injury claims, which totaled 150,000 as of June 30, will pass through its bankruptcy unchanged. The company, however, said many of the claimants haven't become sick. According to court papers, about 7 percent of the asbestos claims filed against Dana allege mesothelioma or cancer.
"The vast majority of cases filed against Dana do not involve any of Dana's products and ultimately are dismissed," the company said. The asbestos claims "were neither a significant factor in Dana's decision to file its Chapter 11 case nor a driving force in the Chapter 11 proceedings."
Dana said it has pursued settlements to avoid further litigation costs. The latest settlement, which will cost a maximum $2 million if all claimants can submit the required proof to support their claims, will resolve about 7 percent of the mesothelioma claims and 4 percent of the cancer claims filed against the parts supplier.