U.K.-based MacLaren, which produces strollers and carriers for babies, has agreed to take on the product liability lawsuits of its bankrupt American distributor.
The distributor, formerly known as MacLaren USA, had been struggling under a flood of product liability claims related to a 2009 recall of defective strollers. The defective strollers ended up amputating the fingers of the babies they were carrying.
One of the plaintiffs was Kaylani Spieckerman and her mother Tanuja Karunakar. A digit on one finger of Kaylani's right ahnd was amputated in Oct 2011 by a Maclaren Triumph Canopy Stroller. They filed a lawsuit against Maclaren USA, with Toys “R” Us and Babies “R” Us as co-defendants.
After MacLaren USA changed its name to American Baby Products and filed for Chapter 7 bankruptcy protection in Dec 2011, the seven lawsuits against it came to a halt because of the automatic stay provision of the federal bankruptcy code. However, the judge in the U.S. Bankruptcy Court in Connecticut provided relief from automatic stay to several plaintiffs, including Kaylani Spieckerman, and allowed some of the cases to proceed.
The judge's decision allowed the plaintiffs to continue seeking money from the defendant's insurers, but not from the estate's assets that were being liquidated to pay off creditors. Since the estate had only about $50,000 in assets left, there wasn't much left to fight over. So the cases continued this year through the bankruptcy.
But MacLaren, the U.K. manufacturer, stepped in and said they would cover all monies owed by the American distributor as of May 1, 2012, which was the cutoff date for filing creditor claims against American Baby Products in the bankruptcy court. In addition, MacLaren said they would cover insurance deductibles for the product liability claims and take care of uninsured claims where appropriate.
The company also announced that they would from now on be distributing their products in the U.S. directly, instead of through distributor companies.
Did you know?
There are three types of product liability claims that can be made.
Product liability claims can be claimed over defective manufacturing, design or marketing. Defective marketing refers to inadequate labels that fail to inform you of the possible risks of using the product. Defective manufacturing refers to a faulty product or faulty batch that malfunctions or does not function as stated by the manufacturer.