(Reuters) - Toyota Motor Corp (7203.T) agreed on Tuesday to pay $25.5 million to settle a U.S. shareholder class action lawsuit accusing the company of not disclosing safety and quality issues related to recalls and reports of unintended vehicle acceleration in 2010.
The proposed cash settlement was detailed in documents filed by the plaintiffs in the U.S. District Court in Los Angeles.
The settlement must be approved by U.S. District Judge Dale Fischer in Los Angeles. If approved, the settlement would resolve a major lawsuit that had dogged Toyota since reports of its vehicle recalls stole headlines two years ago.
Mike Michaels, a spokesman for Toyota, said in a statement the settlement contained no admission of wrongdoing. The company agreed to the accord to “to avoid the expense, distraction and uncertainty of further proceedings,” he said.
“We are pleased to be turning the page on this legacy legal issue, pending court approval, and believe this is a reasonable outcome,” Michaels said.
Plaintiffs counsel Blair Nicholas declined comment.
Toyota investors began suing Toyota for securities fraud in February 2010 amid reports of accidents related to unintended acceleration by Toyota vehicles.
Toyota subsequently recalled up to 10 million Toyota or Lexus vehicles at a cost of $5 billion.
Investors led by the Maryland State Retirement and Pension System claimed Toyota concealed problems in its vehicles. The misconduct resulted in a $30 billion drop in the company’s stock market value.
In July 2011, Judge Fischer pared down the case substantially by holding that investors who had bought Toyota common stock couldn’t sue under Japan’s Financial Instruments and Exchange Act.
The ruling limited the case to covering claims just of investors in Toyota’s American Depository Shares. A motion to certify the class had been fully briefed at the time of the settlement.
In the court papers on Tuesday, the Maryland pension fund said it estimated the maximum amount of net damages investors could obtain at trial would be $124 million.
Court documents state that the plaintiffs lawyers will apply to the court for approval of a contingency fee of up to 12 percent, or $3.06 million, plus up to $2 million in expenses.
The law firm Bernstein Litowitz Berger & Grossman acted as lead counsel for the plaintiffs.
The case is In Re Toyota Motor Corporation Securities Litigation, U.S. District Court, Central District of California, No. 10-cv-00922.
Reporting By Nate Raymond in New York; Editing by Muralikumar Anantharaman