Takata’s U.S. Unit Reaches Tentative Deal to End Bankruptcy

Takata Corp.’s unit in the U.S. has reached tentative agreement on a plan that would end its bankruptcy and enable the sale of its viable business, according to a court filing on Saturday.

A hearing before the U.S. Bankruptcy Court in Wilmington, Del., will review the plan, perhaps as early as Thursday, Reuters reports.

Under the plan, Takata’s TK Holding Inc. unit would set up a trust to pay compensation for past and future deaths and injuries caused by the company’s exploding airbag inflators. The devices have been blamed for at least a dozen fatalities and more than 100 major injuries in the U.S. alone.

The agreement has the support of 12 carmakers and the committees representing victims and unsecured creditors. The deal also is backed by Michigan-based Key Safety Systems Inc., which agreed in November to buy most of Takata’s operations in the U.S. for $1.6 billion.

Reuters says the Chapter 11 bankruptcy settlement would pay victims from $10,000 for bruises to $5 million for death or loss of eyesight. Those who agree to a payout would be barred from also suing participating carmakers for compensation.

An estimated 90 million Takata inflators will be gradually replaced in the U.S. through a series of recalls by 19 vehicle manufacturers. Those carmakers also are replacing tens of millions of the devices in vehicles sold overseas since 2000.​​​​​