Takata Corp. filed for bankruptcy protection in Japan and the U.S., after the world’s biggest automotive recall scandal. The company will be bought by the U.S. supplier Key Safety for $1.59 billion. The sale will not include some operations related to Takata’s business in the ammonium nitrate airbag inflators that were the subject of a global recall linked to defects that resulted in some airbags exploding with too much force and spraying the cabin with metal shards.
Malfunctioning Takata airbag inflators have been linked to at least 16 deaths and 180 injuries worldwide and a $1 billion fine in the U.S. In January, a federal grand jury indicted three former Takata executives for criminal wrongdoing in connection with the safety defect. Key Safety said the amonium nitrate airbag inflator operations would be run by a reorganized Takata following the closing of the transaction -- and they would eventually wind down.
Seventeen automakers -- including Honda Motor Co., Toyota Motor Corp. and BMW AG -- were listed as unsecured creditors with unknown claims related to recalls and indemnification, according to the filing. Litigation claims, which have not been estimated, included those from class-action plaintiffs in the U.S. and Canada and the attorney general of the U.S. Virgin Islands. The National Highway Traffic Safety Administration has an $180 million claim for fines and penalties.
Recalls of Takata's airbag inflators began around 2008 and involve around 100 million inflators around the world used in vehicles made by 19 automakers, including the creditors listed in the case. Recalls are to continue through at least the end of 2019. Key Safety’s purchase aims to leverage other Takata assets, such as safety belts.
