Japanese automotive safety supplier Takata Corp, which earlier this year accepted a $1-billion settlement when it pleaded guilty to fraud in U.S. federal court, is reportedly preparing to file for bankruptcy, according to Reuters.
Takata Corp., the Japanese company facing billions in liabilities stemming from its defective airbag inflators, is preparing to file for bankruptcy as early as next week as it works toward a deal for financial backing from USA auto parts maker Key Safety Systems Inc., sources told Reuters on Thursday.
The company could file for bankruptcy next week, with Key Safety Systems involved in a financial deal to secure continued operations for a restructured company. However, automakers are concerned that Takata could go bankrupt without a finalized deal in place, as that could disrupt the production of replacement airbag inflators for recalled vehicles.
With more than 65 percent of 46.2-million recalled Takata airbags in the USA still not repaired, the bankruptcy could disrupt the production of replacement airbags inflators.
The U.S. District Court in Detroit earlier this month said it will consider Kenneth Feinberg, a lawyer who has administered some of the nation's highest-profile settlements, to replace former Federal Bureau of Investigation director Robert Mueller in overseeing the $1 billion settlement fund. Mueller stepped down from his role to accept an appointment as special counsel to oversee the FBI's investigation of Russia's alleged efforts to influence the presidential election.
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Japan's Takata Corp 7312.T , facing bankruptcy over the biggest recall in automotive history, would stop making air-bag inflators when the global recall is completed, under a plan its steering committee and other major players are considering, sources told Reuters on Friday.
Takata inflators can explode with excessive force, unleashing metal shrapnel inside cars and trucks.
At least 16 deaths and more than 180 injuries have been linked to the defects globally. Takata is hoping to erase billions in liabilities and resolve the recall of air-bag inflators. Recalls are to continue through at least the end of 2019. In March, Toshiba Corp.'s USA nuclear unit Westinghouse Electric filed for Chapter 11 bankruptcy.
Moreover the company paid a $25 million fine, $125 million to people hurt by the airbags and $850 million to companies that used them. "Presumably, Takata will continue manufacturing airbags throughout the bankruptcy proceedings".
"Replacing defective airbags is still the most important issue for manufacturers on the Takata front, and the most important issue for this story as a whole".
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