Takata reaches settlement that should end bankruptcyby Byron Hurd
Beleaguered airbag supplier to exit Chapter 11.
Takata's U.S. arm has reached a settlement agreement with its creditors, its auto industry clients and representatives of those injured and killed by its products, paving the way for the troubled supplier to emerge from its Chapter 11 restructuring.
Settlements with individual manufacturers have been finalized over the course of the past several months. This final settlement covers remaining loose ends for Takata's U.S. operations, the remainder of which will be sold to Key Safety Systems if this final settlement is approved.
Part of the deal includes establishing a trust to pay out claims to individual victims (or their families, in cases where the victims are deceased) of faulty airbags. Compensation will range from $10,000 for minor injuries to $5 million for severe injuries (including blindness) or death, Reuters reports.
Key Safety Systems will pay $1.6 billion to acquire Takata's remaining U.S. operations. Part of that cost will go toward the trust.
The Takata saga has been unfolding for years, and cars with the company's defective airbag inflators have been sold for more than a decade. Recall campaigns conducted over the past several years have covered millions of vehicles sold around the word, with nearly every major OEM being embroiled in the scandal.
More than 40 million cars were sold with Takata airbags installed. As of last June, the majority of inflators identified as defective had still not been replaced.