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Toyobo Co., Ltd. Statement Regarding The Whistleblower Suit

Japanese textile company Toyobo makes a statement after the settlement with the United States Department of Justice in Zylon Fiber bullet resistant vests damages lawsuit. A story highlighted in Episode 7 of the Whistleblower series.
Posted on Aug 17, 2018 | 07:00pm
Dr. Aaron Westrick blew the whistle on Second Chance Body Armor and Toyobo Co., Ltd. after he says the two companies conspired to keep the defects of Zylon® a secret, failing to warn law enforcement and the military that the bulletproof vests made with Zylon® were wearing out well before their 5-year warranty.

CBS reached out to the company for a comment and they provided the following statement.  

Statement from Toyobo Co., Ltd.: 

RE: Toyobo Reaches Settlement with United States Department of Justice in Zylon® Fiber Bullet Resistant Vests Damages Lawsuit
 
2018/03/16
With respect to the two actions for damages filed with the United States District Court for the District of Columbia by the United States Department of Justice (the "Plaintiff"), Toyobo Co., Ltd. ("Toyobo") hereby announce that today (March 15, Eastern Time), it entered into an agreement to settle these cases in exchange for Toyobo's payment of USD 66,000,000 to the Plaintiff.

The details are as follows:
 
1. The Background of this Lawsuit from Its Filing up to Settlement
The Plaintiff, who purchased, as well as awarded funds for the purchase of, the bullet resistant vests using Toyobo's Zylon® fibers, filed two actions for damages against Toyobo and Toyobo's U.S. subsidiary, Toyobo America, Inc. (present company's name; Toyobo U.S.A. Inc.)("Toyobo America") with the United States District Court for the District of Columbia in June 2005 (the "First Action") and in June 2007 (the "Second Action") respectively. The First Action was originally filed by Mr. Aaron J. Westrick as Qui Tam action and taken over by the United States.

The Plaintiff alleged that Toyobo knew the strength of Zylon fibers sold to the bullet resistant vest makers would degrade quickly under certain environment, and nevertheless Toyobo did not disclose such fact or made misleading disclosures, resulting in the United States' payment for the defective bullet resistant vests.

Throughout the proceedings of these lawsuits, Toyobo denied the Plaintiff's 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. Thus, today, Toyobo and Toyobo America entered into a settlement agreement with the Plaintiff. In the settlement agreement, Toyobo and Toyobo America deny each and every allegation of the Plaintiff and do not admit any legal liability.

2. Details of the Settlement
(1) Toyobo will pay the Plaintiff a settlement of USD 66,000,000.
(2) The Plaintiff will release any other claims in these cases (the First Action and the Second Action) against Toyobo and Toyobo America.
(3) A stipulation of dismissal with prejudice will be filed in both cases immediately after Toyobo's payment of the settlement amount.

3. Impact on Business Performance
Toyobo is currently investigating the impact this may have on the current business year's business performance. If it becomes necessary to amend the business performance forecast, Toyobo will make an announcement at the appropriate time.

4. Other Lawsuits
There is no other lawsuit pending against Toyobo or Toyobo America in relation to the above-mentioned bullet resistant vests.

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