Toshiba Corp. today said it has recorded a $1 billion charge for costs associated with settling a U.S. class-action lawsuit that accused the company of selling defective PCs.
The suit, which was filed in Federal District Court in Beaumont, Texas, claimed the systems were designed with faulty floppy disk-drive controllers that caused data loss. Without admitting the charges in the suit, Toshiba agreed to provide a $200 to $225 coupon to all PC owners under warranty as of March 5, 1999, and a $100 coupon to all PC owners without a warranty.
Toshiba officials said the case was settled because "there was a serious risk that a substantial amount of compensation could be awarded through a jury verdict." The settlement applies only to U.S.-based buyers of Toshiba PCs.
Toshiba subsequently revised its financial forecast for the fiscal year ending March 31, 2000. The company now expects to report a loss of $480 million, double its original projection.