Facing billions of dollars in debt, automobile airbag manufacturer Takata has filed bankruptcy, asserting their financial inability to pay their creditors. This latest development comes after years of litigation and will have far-reaching implications for the automobile industry, as well as individual victims impacted by horrific accidents involving the company’s defective airbags.
Takata filed for Chapter 11 bankruptcy in the United States, as well as Japan. Its leaders are asserting that the company has insufficient assets to pay all of its debts. As reported by the New York Times, Takata seeks to sell its assets to a Michigan company called Key Safety System for $1.2 billion. Once the sale is complete, a portion of the company will remain to assist with airbag inflator replacements.
Proceeds from the sale will be used to pay legal debts and claims, but it is not sufficient to cover the amount of debt currently owed by Takata. As represented in bankruptcy filings, the company’s debts range from $10 billion to $50 billion. This amount represents court rulings for numerous product liability claims, as well as case settlements and pending claims that have not yet been concluded.
The effects of a Takata bankruptcy
According to Takata’s bankruptcy filing, there is not enough money to cover the legal claims of everyone impacted by the company’s negligence. The proceeds from the impending sale are not even sufficient to cover the costs of all product recalls involving the faulty airbags. Even with this shortfall, various automobile manufacturers assert that it will continue replacing defective Takata airbags until the process is complete.
While car companies account for most of Takata’s debt, individual victims may also be impacted by the company’s inability to pay. The company’s defective airbags have been linked to 14 deaths. Legal compensation for these victims equates to about $175 million. Though the company has pledged a commitment to paying this debt, payment details will ultimately be determined by the bankruptcy court.
When products injure consumers
When defective products cause harm to consumers, the resulting physical harm can be serious or even fatal. These cases may stem from numerous circumstances, including:
- Design defects. This applies when the product’s design is faulty and the cause of injury.
- Manufacturing defects. These circumstances apply when the defect occurred during the product assembly stage.
- Inadequate warnings. When products are offered to consumers without adequate warnings about the risks of usage.
These cases are highly complex, requiring extensive resources to fully investigate the causes of injury and hold all responsible parties accountable.
The skilled Los Angeles product liability lawyers of Taylor & Ring have the knowledge and resources necessary to mount a successful claim against negligent product manufacturers. We have a proven track record of success and we put our experience to work for each and every client. Call our office today at 310-776-6390 or complete our contact form.
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