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Takata seeks United States bankruptcy protection after air-bag recalls

Takata seeks United States bankruptcy protection after air-bag recalls

At least 16 deaths and 180 injuries worldwide were linked to the faulty airbags. This points to around 40 million air bags as yet uncollected in the US and Japan combined.

After kick-starting the world's largest automotive recall, Takata has resigned to fate and filed for bankruptcy protection.

The filings for bankruptcy open a door to be rescued financially by Key Safety Systems, a parts supplier based in MI and owned by Ningbo Joyson Electronic based in China.

The Takata bankruptcy will take some time to resolve.

The issue was attributed to the nitrate-based propellant used by the airbags' inflating system, which is prone to explode after prolonged exposure to hot and humid conditions.

The company's USA operation, TK Holdings, filed Chapter 11 bankruptcy in Delawere on Sunday, while the Japanese parent filed for protection with the Tokyo District court early on Monday.

News reports have said its liabilities would exceed one trillion yen ($9bn).

Takata will essentially be divided into two companies.

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The chain also manages eight hotels in the United States, as well as properties in Scotland and Panama. The US firm is a joint venture between Juniper Capital Partners LLC and Cowie Capital Partners Inc.


February 2004: Unidentified Takata executive admits to "manipulating" test data on air-bag inflators, according to the company's criminal settlement with the U.S. Justice Department. After the procedure of bankruptcy, which will end approximately in the first quarter of 2018, the company's structural units in charge of safety belts and child vehicle seats will be sold for 1.59 billion dollars to an American company Key Safety Systems (KSS).

KSS says that by purchasing almost all of Takata's business, it will create a leading global safety supplier.

Takata had taken a major step in reaching a settlement with the United States authorities earlier this year: accused of concealing the problem for years, pleaded guilty and pledged a fine of $ 1 billion In order to escape a criminal trial. And it has promised the USA government that it would pay $US125 million in compensation to victims.

The problem, though, is that 100 million of the Takata inflators worldwide have been recalled, 69 million in the US alone in the biggest automotive recall in American history.

Takata's biggest customer, Honda, first started recalling Accord and Civic models in 2008 to replace the supplier's air bags.

"The combined business would be well positioned for long-term success in the global automotive industry", Takata CEO Shigehisa Takada said Sunday in a statement.

January 22, 2016: Federal auto safety regulators attribute a tenth death to a ruptured Takata air bag. Also, three former Takata execs have been indicted about the safety defects. Toyota, Subaru, Mazda and BMW will reimburse out-of-pocket expenses, provide loaners to some vehicle owners and set up an outreach program to increase participation in recalls, according to court papers filed May 18.