Se Habla EspaƱol
Frischhertz Poulliard Frischhertz & Impastato LLC Frischhertz Poulliard Frischhertz Impastato LLC. | Personal Injury Law
Call OR Email Us For a Free Consultation
504-264-9915 866-920-5611

Bankruptcy impacts airbag lawsuits

Takata Corp. faced an additional global recall last week for its defective airbags and the number of confirmed deaths associated with this product defect rose again. Additionally, car manufacturers are using Takata's recent bankruptcy filings to limit their liability for installing these defective car parts.

The airbags broke down over time and could inflate with disproportionate force. Since 2009, the company's defective airbags were blamed for 17 deaths and at least 180 injuries. Earlier this month, the National Highway Traffic Safety Administration expanded a worldwide recall of the airbags which is expected to include 69 million vehicles and 125 million inflators.

Most of these defective airbags have not been replaced yet. Takata entered a settlement with the U.S. Department of Justice in January. It put aside $125 million in compensation for consumers and $850 million in restitution to automobile manufacturers.

Takata filed for bankruptcy in Japan and the United States in June after it incurred $50 billion in liability. It planned to sell its operations unrelated to air bags to Key Safety systems. The air bag division would continue to manufacture replacements for the inflators that were recalled.

In its Chapter 11 filings, Takata claimed that it would create a compensation fund for future airbag injuries. This is typical for bankrupt companies which produced faulty products so that they can receive contributions from other potentially responsible parties.

These parties then receive protection from ongoing litigation. Auto manufacturers may also demand these protections in return for their contributions to a Takata fund. In early July, people who were injured by these airbags were appointed to an independent official committee in Takata's U.S. bankruptcy. It will have a strong role in the bankruptcy proceedings. This committee will operate independently of another committee comprised of suppliers and vendors who may pay more attention to the future of businesses than disputes over compensation. Normally, bankruptcies have just one official creditors committee.

This injured driver committee may confront auto manufacturers who are trying to limit their liability for installing these airbags. Takata must provide this committee with funds that can pay for investigation of the manufacturers' liability or to dispute financial assumptions.

An attorney can assist consumers injured by defective vehicle parts or other unsafe projects. They can seek evidence and help assure that rights are protected in a personal injury lawsuit.

Source: Reuters, "Takata's bankruptcy to pit automakers against air bag victims," By Tom Hals and Tina Bellon, July 17, 2017

No Comments

Leave a comment
Comment Information