Takata Airbag Company Declares Bankruptcy
I’m Ed Smith, a Sacramento Products Liability Lawyer. Those who have experience owning a motor vehicle have likely seen news articles for product recalls. Many people’s reaction to this news is to check and make sure that they don’t own a recalled product. Takata is only one of many products to have been recalled in recent years.
Takata Airbag Recall
The Takata Airbag Recall represents one of the largest recalls in history. This product liability issue that was revealed by the numerous auto accidents has recently driven this company into bankruptcy. Takata, in essence, will cease to exist as a company as the effects of its financial problems reach global proportions. In the United States, the company recently filed for Chapter 11 bankruptcy. Any of its surviving operations are going to be sold off to one of its rival airbag suppliers. The company is headquartered in Japan, where it is also filing for bankruptcy. The company reached this decision after its leadership and advisers calculated that the company owed too much money to remain afloat.
The Process
The bankruptcy process is a complicated one that is not expected to conclude quickly. The company’s factories are going to be sold to a rival called Key Safety Systems. The money Takata will gain from the sales will be used to pay down a significant proportion of its debt. The company owes a substantial amount of money from the settlements of various product liability and defective device lawsuits. After this, a small section of the Takata Company is going to persist to continue replacing the airbag inflation devices, one of the main problems from the initial recall. Once the assets are sold off, Takata will conclude any remaining lawsuits and legal disputes with various financial entities, auto manufacturers, and individuals who have filed suit against the company. The process is expected to conclude around March of next year. Finally, all of the recalled cars are expected to be fixed.
Is There Enough Money?
Unfortunately, Takata likely will not earn enough money from the sale of its assets to compensate everyone who has filed for damages. The liabilities that Takata is expected to owe could reach as high as $50 billion dollars. The company is likely to fall short of this number even after the sale of its assets to Key Safety Systems. Some people could be left to fend for themselves. For this reason, anyone who is involved in a product liability case should seek legal advice quickly. The earlier the process gets started, the better chance the case has of reaching a just conclusion.
Contact an Experienced Product Liability Attorney Today
I’m Ed Smith, a Sacramento Products Liability Lawyer. Drivers and passengers everywhere depend on airbags to save their life in the event of an emergency, not cause them harm. If you or a loved one has been injured in an auto accident, please reach out to my office at (916) 921-6400 for friendly, free advice. When calling long distance, use my toll-free number, available at (800) 404-5400.
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Source: https://www.nytimes.com/2017/06/26/business/takata-japan-bankruptcy.html
Image Attribution: Wikimedia Commons
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