Massive Bankruptcy Follows Massive Suits In Re Takata
The Japanese airbag company Takata rose and fell rapidly. But the company's stunning destruction was of its own doing. After all, it knew that its faulty airbags had the potential to cause avoidable injuries and deaths. But billions of dollars of issues surrounding the defective products ultimately pushed the company into bankruptcy.
Now that the company is undergoing Japan's equivalent of Chapter 11, what does that mean for Americans hurt by its defective products? After all, lawsuits and pending litigation still stand against the corporation.
Bloomberg reported on some of the impacts. Takata promised replacements for tens of millions of faulty airbags, which now seems unlikely. So the announcement will place the company in stasis. This decision follows a $1.62 billion takeover bid by another company, Key Safety Systems aka Joyson Safety Systems.
But Key hasn't stated whether it will replace the faulty parts. While Takata's assets get auctioned off, it appears its recall obligations will not follow suit. At least some of the impact of the recall should be offset by auction. So up to $2 billion in assets go to the auctioneer's block.
Takata is on the hook for about the same in costs. However, the 19 car manufacturers hurt by the airbag giant is still on the hook for about $3 billion in additional costs. Late in 2014 multiple news reports broke the incredible story. Installed airbags from Japanese company Takata airbags were defective. Such errors could result in severe issues when the airbag becomes deployed. Hence, due to the sensitive nature of the equipment and the conditions in an accident, a car accident airbag error could be fatal.
Ford's Takata Made Airbag Recalls.
One of the vehicles involved in the announcement was their 2005-2007 Ford Mustang. So these vehicles have gotten recalled since the news broke. Ford is now offering free repairs for owners of model years 2005, 2006, and 2007 Mustangs.
So these airbags need to get changed out to prevent severe injury or even death. Consequently, failure to heed the recall could result in accidental deployment or an auto accident. Also, there are concerns malfunctioning airbags could launch shrapnel into vehicle occupants.
Not Just Fords?
Multiple other vehicle types were in the massive recall. Toyota alone recalled over a million vehicles off the road. The Wall Street Journal reported the Honda Accord as one of the models with the Takata airbags. The issue included vehicles from General Motors, Chrysler, Mitsubishi, and Subaru. The National Highway Transportation Safety Administration now offers a free online tool. Because of this tool, drivers determine if their car has defective Takata airbags.
Takata Pleads Guilty In Criminal Airbag Defect Cover Up!
It appears the Airbag maker pled guilty in this case to cover-up related to deaths. A court fined the company $1 billion in this case. Takata, a Japanese auto supplier, did enter a guilty plea. The plea, in this case, made Monday in Detroit federal court. So this fulfilled the requirements of a deal with the U.S. Justice Department that included a guilty plea and a victim's compensation fund. It's a fund for victims and families of the airbags.
It's a fund for victims and relatives of the airbag defect. In this case, it stems from the company covering up a flaw in airbags. The airbags resulted in 16 deaths.
Settlement and Agreement.
The auto supplier agreement did include a 1 billion dollar fund. Though, they had to open a compensation fund. And the fund needed to be $125 million set aside for victims and families.
It's known at least 16 people died because of the malfunctioning airbags. Of particular concern, another one hundred people suffered injuries due to the failed airbags. Further, three Takata executives did get indicted by the government. But in this case, the charges against the executives were for creating false test reports. The executives did it to hide the airbag defect. And if the airbags had real trials, numerous deaths and injury remained avoidable. The true test results could have saved victims from untold injuries and death.
The airbags, in this case, did get installed in dozens of automobile models. It, in fact, led to a U.S. recall for over 42 million vehicles. The National Highway Traffic Safety Administration focused on the oldest cars first. Older models recalled by NHTSA first because of the research.
In this case, it shows that Takata airbags become unstable. In this instance, due to the chemicals used in the airbags. Because of a shortage of replacement parts, the auto recall comes in stages. Older model cars have a high risk, of course. The parts, of course, need replacement to avoid the dangerous risk in this case.
Expanded Takata Airbag Recall?
In the first place, Takata resisted expanding the recall. Though, they did so only due to pressure from the NHTSA. Also, the auto supplier followed suit, along with General Motors and Volkswagen. They hired lawyer Kenneth Feinberg. And he is the attorney appointed to oversee the $125 million compensation fund.
In fact, the lawyer has experience creating similar funds too. He oversaw funds for those impacted by 9/11 and the BP oil spill. The oil spill, of course, did happen in the Gulf of Mexico in this case. Volkswagen, though, of course, did use the lawyer to run a fund. Because of problems in fact with automakers diesel engines.
Takata will compensate affected automakers $850 billion. In this case, automakers remain severely impacted because of the airbag scandal. It's believed this amount will cover a mere fraction of the loss. The loss suffered by the automakers or, in this case, will suffer. Because of the false airbag tests and, of course, the recall too.
The airbags research showed airbags became unstable. In this case, the airbags proved unstable due to certain risks. The airbags have a higher risk in areas with high humidity. The problem's the ingredient ammonium nitrate that became explosive. It's used to inflate the airbags and also the cause of the instability.
Risk of Face and Eye Injuries?
Takata airbags can inflate in an inappropriate manner. Airbags that inflate improperly can release shrapnel. The explosion sent shrapnel of course into the passenger compartment too. This flying metal and debris have resulted in over one hundred injured and at least 16 killed.
What Happens to Consumers?
Consumers still on the hook for bills and long term care for injuries or replacements from Takata still have a chance. However, the window is closing. Bankruptcy laws may lock in existing suits and prevent future ones from affecting. Even if the cases are allowed to proceed, diminishing assets may make recovery very difficult.
If you believe your family may be entitled to compensation, contact a skilled attorney today. The Ehline Law Firm Personal Injury Attorneys, APLC's experience is critical. We handled Takata and airbag cases before. Simply put: in California, our team is second to none. We will assess your family's legal options and honestly guide you. Call or email us for a free, no-pressure consultation.
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