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Judge Says He’s Inclined to Back VW Settlement

October 18, 2016

IAA truck show in HanoverIAA truck show in Hanover
The logo of German car maker Volkswagen is seen at the IAA truck show in Hanover, September 22, 2016. Fabian Bimmer—Reuters

A federal judge in San Francisco on Tuesday said he is “strongly inclined” to approve a record-setting $10.033 billion proposed buyback and compensation offer from Volkswagen AG (VLKAY) for 475,000 owners of polluting 2.0-liter diesel vehicles.

U.S. District Judge Charles Breyer said he will issue a final decision in the matter, stemming from Volkswagen’s use of illegal software to defeat U.S. emissions testing, by Oct. 25.

Owners, lawyers and others appeared before Breyer during a hearing raising arguments about why they think Volkswagen is failing to offer enough money for buybacks or refunding for other out-of-pocket costs like extended warranties, maintenance and government licensing fees. VW has agreed to spend up to $16.7 billion to address its so-called U.S. “Dieselgate” costs.

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Breyer also on Tuesday granted preliminary approval during the three-hour hearing to a $1.21 billion settlement with VW’s U.S. brand dealers. He also stressed the urgency of VW reaching agreement with regulators on a resolution for about 85,000 polluting vehicles.