Takata goes into restructuring with Chapter 11 filing

In addition, TKJP’s main U.S. subsidiary, TK Holdings, Inc., and certain of its North America affiliates and subsidiaries, filed for Chapter 11 in the United States Bankruptcy Court for the District of Delaware. It is expected that the proceedings under the Civil Rehabilitation Act in Japan and Chapter 11 process in the U.S. will be completed in the first quarter of 2018. Takata intends to use the Civil Rehabilitation and Chapter 11 processes to address the costs and liabilities related to airbag inflator recalls, including to fund its remaining obligations under the terms of the plea agreement with the U.S. Department of Justice that was announced on January 13, 2017 and Consent Orders entered into by Takata with the National Highway Traffic Safety Administration. Pursuant to the DOJ Plea Agreement, Takata paid USD 25 million as a fine to the DOJ and was required to fund two restitution funds: (1) a fund of USD 125 million to meet liabilities to current or future personal injury claimants and (2) a fund of USD 850 million to satisfy a portion of the claims of OEM customers who purchased airbags containing PSAN inflators. Mr. Takada said, “We believe taking these actions in Japan and the U.S. is the best way to address the ongoing costs and liabilities of the airbag inflator issues with certainty and in an organized manner while ensuring that Takata’s operations worldwide continue in the ordinary course and without interruption. During the Civil Rehabilitation proceedings and Chapter 11 process and beyond, Takata remains fully committed to supporting all actions that advance vehicle safety. We deeply regret the circumstances that have led to this situation, but we are grateful to have reached a resolution that will allow us to continue to promote the safety of the driving public.” Shigehisa Takada, said “We are committed to ensuring that the restructuring process has as little impact as possible on our employees, customers and suppliers across the world, as well as on drivers whose safety is always our primary focus.”