Back in June of this year (2017), airbag manufacturer Takata announced they had filed for bankruptcy and indicated that U.S.-based Key Safety Systems (KSS), a Chinese company, would be taking over the company’s assets.
Now, according to Reuters, the deal is about to be finalized, with KSS paying $1.6 billion for the assets. Lawyers for TK Holdings indicated that the agreement was fully negotiated and that the final papers would be provided for KSS to sign within a few weeks.
The final sale does have to be approved by the U.S. Bankruptcy Court. KSS will take over only Takata’s viable operations. Both companies have pledged to continue working to supply the airbag inflators needed for replacement parts.
KSS Promises to Keep Takata’s Employee Base
There were questions about the completion of the deal after KSS CEO Jason Luo resigned recently, leaving for a job in China on August 31, 2017. The company has stated it is looking for a replacement, but meanwhile, the deal is expected to go through as scheduled. Ron Feldestein, senior vice president of global sales and marketing, confirmed that the deal would go forward in an email, according to Crains Detroit Business.
KSS beat out several other competitors in its bid for Takata, which has been plagued by exploding airbags for years. The defective airbags can allegedly rupture upon deployment, sending shards of metal and plastic into the interior of a vehicle, potentially causing life-threatening injuries. To date, at least 17 people have allegedly been killed worldwide by Takata airbags, and nearly 200 injured.
KSS stated that it would maintain Takata’s employment base, but that it does intend to end the creation of all airbag inflators using ammonium nitrate as fuel. Studies have identified the fuel as being unstable, particularly with age and exposure to high temperatures and humidities. The National Highway Traffic Safety Administration (NHTSA) required Takata to phase out the use of this fuel, unless they could prove it was safe.
Once the deal is complete, KSS will be one of the largest safety product suppliers in the country. It is planning to increase air bag inflator production in the future.
Automakers Reach Settlement Agreements to Reimburse Vehicle Owners
Several automakers have already reached settlement agreements with plaintiffs claiming economic damages. As people have tried to get their air bags fixed, they have faced delays as dealerships worked to get parts in. Many have had to leave work, pay for rental cars, hire child care workers, and more to actually get their vehicles fixed.
In May 2017, Toyota, Subaru, Mazda, and BMW agreed to a settlement worth $533 million. People who owned or leased vehicles affected by Takata’s airbag recalls were eligible for compensation for the costs mentioned above, up to $500. Part of the money also went toward an outreach program to alert more vehicle owners to the risks.
In September, Honda agreed to a similar settlement totaling $605 million. Again, owners were eligible for up to $500 in reimbursement costs, and part of the money went toward increasing awareness of the recalls.
Federally filed Takata lawsuits were centralized in Florida back in 2015. In August 2017, a Delaware bankruptcy judge temporarily halted the prosecution of some lawsuits against Takata to allow them to complete reorganization, but refused to delay the federal MDL.
Exclusively focused on representing plaintiffs, especially in mass tort litigation, Eric Chaffin prides himself on providing unsurpassed professional legal services in pursuit of the specific goals of his clients and their families. Both his work and his cases have been featured in the national press, including on ABC’s Good Morning America.