Posted on behalf of Stephens, Anderson & Cummings on Nov 17, 2016 in Product Liability
As Takata Corp. seeks a financial backer to help pay billions of dollars in fines and other costs related to the recall of its defective airbags, officials are considering filing bankruptcy in the U.S.
Takata has recalled more than 100 million airbags from around the world due to defective inflators that can spray shrapnel into vehicle cabins when airbags are deployed. Defective Takata airbags have caused more than 100 injuries and 16 deaths, including 11 in the U.S.
Filing bankruptcy could help Takata negotiate a deal with automakers to share costs related to the recall, which could be around $13 billion, according to estimates from experts and auto manufacturers.
Making a deal with automakers could help the company make a separate deal with an outside investor to provide Takata with an infusion of cash.
Outside investors are looking for assurances that Takata will not face expensive claims from auto makers in the future, according to those advising Takata.
Downside to Filing Bankruptcy
There may be some benefits to Takata filing bankruptcy. However, filing bankruptcy could also make it difficult for the company to continue, says Takata chief financial officer Yoichiro Nomura.
The company's official position is to seek an out-of-court settlement, as there is no other option to ensure the supply of products, says Nomura.
Auto makers are also concerned about Takata's long-term viability after filing bankruptcy. They would like the company to stay in business, because it helps drive down prices and represents approximately 20 percent of the international airbag industry.
The Takata airbag recall is the largest auto safety recall in U.S. history and affects approximately 70 million airbags.
If you have been injured or lost a loved one because of a faulty Takata airbag, contact the Takata airbag defect attorneys at Stephens, Anderson & Cummings. We will aggressively pursue maximum compensation for physical, financial and emotional damages.