By Tom Hals
| WILMINGTON, Del.
WILMINGTON, Del. Lawyers for people injured by exploding Takata Corp (7312.T) air bags told a U.S. bankruptcy court judge on Tuesday that the company's restructuring plan is being skewed to benefit automakers over victims.TK Holdings Inc, the U.S. business of Takata, filed for Chapter 11 bankruptcy on Sunday due to tens of billions of dollars of liabilities from recalls and lawsuits over its air bags, along with 11 Mexican and U.S. subsidiaries.Most of Takata's obligations are owed to automakers for recalling and replacing millions of its air bags, and the Japanese supplier's restructuring plan relies heavily on financial support from its customers.Several personal injury lawyers told U.S. Bankruptcy Judge Brendan Shannon that Takata had made too many concessions to automakers, without investigating the value of their claims.Lawyers for TK Holdings and General Motors Co (GM.N) argued the need for financing outweighed the need to investigate the protections granted to the automakers, which could be investigated later.
"I will figure that out in due course, but I’m not doing that today," Shannon said.Authorities have linked 16 deaths, mostly in the United States, and more than 180 injuries to explosions of Takata air bag inflators made with ammonium nitrate that became volatile with age and prolonged exposure to heat.Around 100 personal injury and wrongful death cases have been filed in the United States and the company has set aside $125 million for individual claims related to its air bags.
Kevin Dean of the Motley Rice law firm urged Shannon to ensure current and future personal injury plaintiffs get an official committee, which includes a budget for lawyers and advisers."You’ll see 10 years from now these inflators involved in a volume of injuries over time," said Dean. "We’re dealing with horribly injured plaintiffs."
Shannon acknowledged the role of the plaintiffs and said a committee could be appointed. The U.S. case, and parallel foreign proceedings, opens the door to the acquisition of Takata's viable operations by Key Safety Systems (KSS), a Michigan-based parts supplier owned by China's Ningbo Joyson Electronic Corp (600699.SS). Ningbo Joyson acquired KSS in 2016 in a $920 million deal.The remaining operations will be reorganized to churn out millions of replacement inflators for cars that are subject to recalls.Takata in February pleaded guilty in a U.S. federal court to a felony charge as part of a $1 billion settlement that included compensation funds for automakers and victims of its faulty inflators. (Reporting by Tom Hals in Wilmington, writing by David Shepardson in Washington)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Published Date: Jun 28, 2017 03:15 am | Updated Date: Jun 28, 2017 03:15 am