Amid a crippling airbag scandal, automotive company Takata has filed for Chapter 11 bankruptcy protection. The company is still in the midst of the largest recall in the history of the United States. The company is working to fix a defect that has led to at least 16 deaths across the world. Takata is the second-largest airbag manufacturer in the world.
The recalls have led to $1 billion in penalties against the company. It was widely expected that the company would file for protection so it could sell its assets to a rival company. Takata's airbags are used in roughly one-quarter of all the vehicles on the roads of the United States as of an estimate conducted two years ago.
The airbags manufactured by Takata are prone to exploding, sending shrapnel into drivers and passengers in vehicles where they are installed. The recall will not end, as it is expected to continue well past the end of the decade and involves some 42 million vehicles. Auto makers are required to repair the vehicles free of charge to customers and must do so starting with the oldest models in the hottest climates.
The bankruptcy filing by Takata will also not affect the compensation fund established for victims in its criminal settlement with the U.S. Justice Department. The compensation fund sits at $125 million.
The company issued the following statement on Sunday:
"The combined business would be well positioned for long-term success in the global automotive industry. Throughout this process, our top priorities have been providing a steady supply of products to our valued customers, including replacement parts for recalls, and a stable home for our exceptional employees. This agreement would allow that to continue."
At the same time on Monday morning, the company filed a similar restructuring request in Japan.
Chapter 11 bankruptcy in New Hampshire can be a difficult decision to come to for companies. An experienced bankruptcy attorney can help ease the decision and explain the process in-depth.
Source: USA Today, "Air bag scandal-plagued Takata files for Chapter 11 bankruptcy protection," June 26, 2017