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Report: Takata Mulls U.S. Bankruptcy Filing
Takata Corp. is considering filing for bankruptcy in the U.S. to help resolve its liabilities for the recall of some 100 million airbag inflators that have killed at least 14 people, sources tell The Wall Street Journal.
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Takata Corp. is considering filing for bankruptcy in the U.S. to help resolve its liabilities for the recall of some 100 million airbag inflators that have killed at least 14 people, sources tell The Wall Street Journal.
The option could help the struggling company reach an agreement with its carmaker customers, who are conducting the recalls. The Journal’s sources say bankruptcy is only one of several options. They add that Takata's customers are leery of any action that would disrupt airbag supplies. The company controls about 20% of the global market for airbags.
Takata would prefer to avoid bankruptcy by reaching an out-of-court agreement on recall costs, which analysts say could reach $12 billion. The company has posted losses over the past two years and concedes an unfavorable deal could cast "significant doubt” about the company’s viability.
Takata is reviewing five offers from investors, all of whom have cited bankruptcy as one option. The Journal’s sources say the bidders all are seeking protection from the liability of future recalls.
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