Airbag manufacturer Takata’s airbags have been linked to multiple deaths caused by exploding shrapnel, which prompted the largest automobile recall in U.S. history. Unable to weather this storm, Takata Americas, the U.S. division of Takata Corp., filed for Chapter 11 bankruptcy protection in Delaware over the weekend, and the parent company filed for protection under Japanese law in Tokyo this morning. Takata Americas has also agreed to sell most of its assets for $1.6 billion to Key Safety Systems, Inc., a Michigan automobile parts supplier.
In 2016, the National Highway Traffic Safety Administration (NHTSA) levied a $200 million fine against Takata in a deal in which Takata admitted that it withheld from the agency important information about its defective airbags. Takata also plead guilty to criminal violations and agreed to pay $1 billion to end a Department of Justice investigation into defective Takata airbag inflators.
In the bankruptcy filing, Takata Americas lists liabilities of $10-$50 billion. NHTSA is listed as a $180 million unsecured creditor. Other creditors include Honda Motor Co., Toyota Motor Corp, Mazda Motor Corp. Nissan Motor Co. and Tesla Inc.
Stay tuned to see how the Takata bankruptcy filing affects pending products liability litigation against Takata.