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North Bay Business Journal

Monday, August 5, 2013, 6:50 am

Zap settles recall suit with $2M in refunds

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    SANTA ROSA — Automobile maker Zap (Bulletin Board: ZAAP) reached an agreement in federal court to pay out as much as $2.14 million in refunds to buy back several hundred three-wheeled electric vehicles that were part of 2009 federal recalls.

    “Zap and the United States have reached a settlement of all matters arising out of the facts alleged in the complaint,” wrote Chuck Schillings, co-chief executive officer of Santa Rosa-based Zap (707-525-8658, zapworld.com), in a July 24 filing with the U.S. Securities & Exchange Commission. When reached by phone last week, he declined to comment beyond what was in the filling.

    A District of Columbia federal judge on July 16 approved a deal between Zap and the National Highway Traffic Safety Administration that would settle the agency’s May 15 lawsuit that sought $17 million to $21 million in civil penalties for allegedly not complying with a November agency order to offer refunds for recalled vehicles.

    Under the settlement, Zap would send refund-offer letters to owners of 691 2008 Xebra sedans and pickups imported to the U.S., offer a $3,100 refund per vehicle then pay to have the vehicles hauled away for salvage, according to the 12-page consent decree signed by judge Rosemary Collyer. Zap must issue refunds by the end of this year or 30 days after receiving a refund request, whichever is later, and declare each a Xebra a “junk motor vehicle” on state title documentation.

    Zap also would have to declare any 2008 Xebra vehicles it has “junk” so they couldn’t be modified and resold in the U.S., according to the court decree.

    The company must also report to the safety administration regularly about the status of the refund on and disposition of each recalled vehicle for three years, according to the settlement agreement.

    In the July 24 filing, Mr. Schillings wrote that the refund letters had been sent, as required within five days of the court decree. In its most recent financial report, Zap had current assets of $36 million, including $1.2 million in cash and $16 million in restricted cash, as of March 31.

    The agency issued recall notices in 2009 over reported problems with insufficient brakes on the 2008 Zap Xebra, imported from Qingqi Group Motorcycle in China. After a Nov. 13 safety administration hearing over Zap’s alleged lack of cooperation with the recall, the agency ordered Zap to offer $3,100 refunds.

    In its May lawsuit against Zap, the administration said it was the first time a lawsuit was necessary to enfoce compliance with a recall.

    In other Zap news, the company is holding a vote at its Aug. 7 annual shareholder meeting to reduce the number of board seats from seven to five, and nominees for seats don’t include former co-CEO Steven Schneider or Mark Abdou but does include current co-CEO Alex Wang, 30, part of the family that owns China-based Jonway Group, according to regulatory filings.

    All three were key figures in a board room and legal battles with Chairman Priscilla Lu of major investor Cathaya Capital over control of the company early this year.

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    Comments

    22 Comments

    1. September 19, 2013, 11:49 am

      by Robert Newsome

      I have 2 2008 Zap Zebra vehicles. What number do I call to see about a settlement over the brake system? [phone number redacted. Thanks- Robert Newsome


    2. September 19, 2013, 12:04 pm

      by Jeff Quackenbush, Business Journal Staff Reporter

      Zap’s phone number is 707-525-8658.


    3. January 6, 2014, 9:08 pm

      by RAYMUNDO.GARCIA

      I got my mail.and I have not heard from any one , they were going to pick it up bu the end of the year. whats up ..


    4. January 16, 2014, 1:20 pm

      by EVERETT KNOTT

      WHEN IS THE CARS GOING TO BE PICKED UP THAT ARE ON THE RECALL 1-16-2014


    5. January 16, 2014, 9:32 pm

      by Angie

      I am also waiting to hear something. I was notified after I sent in the paperwork that someone would be contacting me to come get the car but no one has and it’s passed the deadline. Also, no response to email and voicemail box at Zap is full…. anyone know what action can be taken?


    6. January 28, 2014, 6:46 am

      by Tim

      I too am waiting. I talked to someone on 1-15-14 who told me he is waiting for “corporate” to give him the ok. He told me he was about as high up the food chain as I could get to get a response. Still waiting……..


    7. February 5, 2014, 1:32 pm

      by SIMON

      I HAVE HOPES FOR THEM TO ACTUALLY HONOR THEIR WORD AND PAY OUT FOR THESE BUT, THEY DON’T RESPOND TO EMAILS, PHONE CALL, OR MAIL… SO I AM SLOW BUT SURELY LOOSING FAITH THAT THIS COMPANY WILL DO THE RIGHT THING. IF ALL ELSE FAILS I WILL MODIFY MINE TO A OLD VOLKSWAGEN SETUP AND WILL FINALLY GET THE RANGE AND SPEED WE ALL WANT OUT OF THESE!


    8. February 5, 2014, 3:18 pm

      by SIMON

      ALSO JUST OUT OF CURIOSITY…
      has anyone received their check yet????


    9. February 14, 2014, 7:11 am

      by Joe Bob

      They sent me a letter stating my vehicle qualifies for the repurchase and they would contact me. It has been almost 4 months and I haven’t heard from them. They did not return my call. Progressive canceled my insurance so I can’t use my Zap. It’s just there taking up valuable space in my garage. Based on this companies history I’m not expecting much but it would be nice to know whats going to happen. I contacted the NHTSA and they told me I needed to contact ZAP.


    10. February 19, 2014, 1:00 pm

      by chuck

      some outfit I did all the paper work and they agreed with it and said we will be in touch. hahaha they do not return any calls or E mails . so much for chinese junk


    11. February 21, 2014, 5:29 pm

      by ROBERT NEWSOME

      TO WHOM IT MAY CONCERN: SUBJECT HART-SHIP
      AS WE HAVE NOTIFIED YOU IN THE PAST ABOUT OUR TWO ZAPS. ONE HAS 2,000 MILES, THE OTHER 7,000. ONE HAS SOLAR, THE OTHER A ENCLOSED CANVAS. WE HAVE $12,000 INVESTED IN ZAP 1 & ZAP 2. WE WOULD LIKE TO KNOW IF THERE IS ANY REPAIRS OR UPGRADING TO PUT THEM BACK ON THE ROAD. I AM DISABLED AND TRAVEL TO THE DR, PICKUP MEDICINE, SOMETIMES ER. WHO WILL BE RESPONSIBLE TO REPLACE THESE VEHICLES OR $12,000 THAT WE HAVE INVESTED? WE WOULD LIKE A ANSWER BEFORE LEGAL ACTIONS ARE TAKEN.


    12. February 25, 2014, 3:22 pm

      by curt erickson

      Yes, if anyone hears from zap I’d like to hear what they had to say too. I’ve got my paperwork in. If I hear back first, I’ll post here.


    13. March 8, 2014, 7:19 pm

      by Mick Phillips

      It sounds like we are all getting the same run around and responce, of nothing. Please advise if anyone finds a way to get more information.


    14. March 22, 2014, 3:27 pm

      by Dave Diehl

      GREAT NEWS!!!!! We finally got the 3100 dollar check and they picked up the 2008 ZAP PK on Friday. I guess there is a light at the end of the tunnel. Be patient my friends. The only tip I would give you all is to be persaverent. As the old saying goes…”The wheel that squeeks the loudest, Gets the most oil” :-)


    15. March 22, 2014, 4:07 pm

      by Ronald Capper

      This is the last I have heard….Jan 7 2914 Xebra Recall Jan 7Toronald capper, Ron,
      Previous management created this nightmare and we are left to deal with it. I apologize for the delays. As far as I know the recall is still in effect. It looks like you might have to wait a little longer. I try to keep everyone informed. As soon as i hear anything I will let everyone know.

      On Tue, Dec 31, 2013 at 1:30 PM, ronald capper wrote:

      Sounds like a bureaucratic bullshit response. For those of us with your worthless cars just more of the same quality service we have come to expect from you at Zap. I hope the gov. gets your tit a bit deeper in the ringer and we owners benefit from it (?????). …. Just sayin’ Ron Capper

      From: Xebra Recall
      To: ronald capper
      Sent: Tuesday, December 31, 2013 1:06 PM
      Subject: Re: Xebra Recall

      Ron,
      We are still processing the recall and will be sending out communications soon regarding the status.


    16. March 22, 2014, 10:20 pm

      by RAYMUNDO.GARCIA

      my car was recall last year They said they would get it pick up at the end of the year. all most 8 mount car sits cause of this recall I m try to call the recall center but it a joke no one will talk to you . who can we get us to help get the car pick up and get my money for the car.


    17. March 31, 2014, 6:44 pm

      by Chester

      Lolita a friend of Tom W. @ Geocities says ZJ got an extension to do State by State recalls and they are doing California first then moving up to Oregon next then Washington. Can’t tell you anything if you don’t live in a Western State. Some folks who bought in deep South from Georgia dealer who has since gone out of business I understand ZAAP wants them to pay ship charge to get cars back to California. Otherwise you may be SOL..


    18. March 31, 2014, 6:46 pm

      by Chester

      Anyone having further difficulty might want to file a report with the BBB I understand the listing for ZAP is now under ‘ one Zap drive ‘ for some reason..


    19. April 21, 2014, 10:46 pm

      by RAYMUNDO.GARCIA

      BBB would be some thing to do . THIS IS UN REAL .


    20. April 29, 2014, 3:54 pm

      by Todd

      Just got my check/ I’m in Nebraska


    21. May 3, 2014, 9:37 am

      by Edgar

      These people want us for fork out a 1200 shipping charge to get vehicle back from Georgia to California. When the resposibility of the ‘recall’ is their problem !!! They stopped answering our calls if we aren’t on the West Coast.. I’ never will buy anything form them again they don’t stand behind their products more then 90 days.. I get better warranties from local companies then that on a 12,000 vehicles.. What a crock.. think you are dealing with a US company and everything they sell is 2nd rate and from China. Every part on this thing needed replacing after 2 years of use.


    22. May 16, 2014, 3:35 pm

      by simon

      I’ve posted here before. Today May 16 2014 still no response. The only thing I’ve got was ONE call back when I left a msg on the sales guys VM. He supposedly looked into why I haven’t heard back and he said “Zap received my paperwork after the 120 days”. This is crock because according to my tracking I put on the return paperwork they refused to sign for it until January 9 which STILL means I had 40 days from the time I HAD to get it to them (120days from initial receipt of recall which was late October for me). I really don’t like lawyers but I think I should get my state attorney general involved. Has anyone contacted they’re Attorney Generals Office?? If so what was the outcome?


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