Published: Sat, June 17, 2017
Money | By Armando Alvarado

Takata To File For Bankruptcy

Takata To File For Bankruptcy

Reuters reported that the Tokyo Stock Exchange has suspended trading in Takata shares following the reports of imminent bankruptcy.

The plan being considered by Takata's steering committee and KSS to resolve Takata's financial woes would have Takata air bags and seatbelts rebranded as KSS products after the car-parts maker emerges from a bankruptcy meant to erase billions in liabilities.

Takata, at the centre of the global auto industry's biggest-ever safety recall, will make a formal decision about the bankruptcy filing at its board meeting this month, the leading Nikkei business daily reported, without citing sources. US vehicle safety regulators are putting pressure on Takata and automakers to speed up the replacement of defective inflators in the United States.

It is the first time in Japan that a Takata or carmaker employee has been referred to prosecutors over a case involving a defective air bag, according to the prefectural police.

Takata (TKTDY), the Japanese auto parts firm, is expected to file for bankruptcy protection as early as this month, likely representing the largest corporate failure in Japanese manufacturing in the post-war era, Nikkei Asian Review reports. So far though more than 65 percent of the 46.2 million recalled airbag inflators in the United States have not been repaired.

The Michigan-based corporation, which is controlled by a Chinese supplier going by the name of Ningbo Joyson, refused to comment on the arrangement. They also have been blamed for more than 180 injuries worldwide.

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Earlier this year an American judge said the costs of replacing all of the faulty Takata inflators could be $8 billion.

Then-U.S. Attorney Barbara McQuade said in January that if Takata filed for bankruptcy, the Justice Department would be a creditor in the restructuring.

Moreover the company paid a $25 million fine, $125 million to people hurt by the airbags and $850 million to companies that used them.

This filing could arrive in the coming week both in Japan and the U.S., where it has a subsidiary and is looking for a buyer.

Almost 100 million cars, including about 70 million in the United States, were subject to the airbag recall, the largest in auto history, over the defective Takata airbags blamed for 11 deaths in the U.S. alone.

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