Takata seeks US bank­ruptcy pro­tec­tion to stay airbag suits

New Straits Times - - Business -

WASH­ING­TON: Ja­panese auto sup­plier Takata Corp filed for United States bank­ruptcy pro­tec­tion on Wed­nes­day in an ef­fort to pause suits against the com­pany over faulty airbag in­fla­tors — more than a month af­ter its US unit filed for bank­ruptcy in the same court.

In its fil­ing with the US Bank­ruptcy Court in Delaware, Takata said the Chap­ter 15 pe­ti­tion was crit­i­cal to en­sure the “con­tin­u­a­tion of Takata’s busi­ness, pre­serv­ing tens of thou­sands of jobs and en­sur­ing that Takata’s busi­ness part­ners con­tinue to have ac­cess to crit­i­cal com­po­nents that en­sure the safety of driv­ers world­wide”.

The pe­ti­tion came as Takata’s US busi­ness separately asked a fed­eral bank­ruptcy judge to sus­pend suits against car­mak­ers that have been brought by airbag vic­tims.

Ma­jor car­mak­ers in­clud­ing BMW AG, Ford Mo­tor Co , Honda Mo­tor Co Ltd and Toy­ota Mo­tor Corp sided with Takata in back­ing a six-month de­lay in suits.

TK Hold­ings Inc, the com­pany’s pri­mary US unit, filed for Chap­ter 11 pro­tec­tion in June along with 11 other US and Mex­i­can en­ti­ties, co­in­cid­ing with Takata Corp’s bank­ruptcy fil­ing in Ja­pan.

Takata said it faces tens of bil­lions of dol­lars in li­a­bil­i­ties from its in­fla­tors, which are sub­ject to the big­gest re­call in au­to­mo­tive his­tory.

At least 18 deaths and 180 in­juries world­wide have been tied to a de­fect that can cause Takata in­fla­tors to ex­plode with ex­ces­sive force, un­leash­ing metal shrap­nel in­side cars and trucks.

The Chap­ter 15 fil­ing seeks to stay suits against Takata Corp as well. An ini­tial court hear­ing on the new pe­ti­tion is set for to­day. Reuters

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Takata says the Chap­ter 15 pe­ti­tion is crit­i­cal to en­sure the con­tin­u­a­tion of busi­ness, pre­serve jobs and en­sure its busi­ness part­ners con­tinue to have ac­cess to crit­i­cal com­po­nents.

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