Takata bankruptcy means victims may not get paid

Published: June 22, 2017

Updated: July 24, 2018

Author: Luke Jones



It is arguably inevitable that Japanese air bag maker Takata would file for bankruptcy considering the scandal that has engulfed the family in recent years. Dozens of people have sued the company over exploding inflators that have killed and injured vehicle passengers. However, these plaintiffs could be left with little recompense for a company now on its knees.

Takata Corp and its U.S. operations are expected to seek bankruptcy before the close of this month. In the deal, the company will offload its assets to Key Safety System Inc. Takata faces a $1 billion settlement in U.S. courts and the undisclosed fee Key Safety will pay will help cover Takata’s costs.

One problem could see many claimants left with proper payment. That’s because Key will buy Takata’s assets “free and clear” of past liabilities. This means money to go to numerous victims will not be enough.

16 people have died globally from exploding inflators, while 180 have been injured. Takata airbags were in dozens of car models and the results was the biggest automotive recall in U.S. history, spanning 19 brands and 42 million vehicles. 100 million inflators have been recalled around the world.

“It destroys people’s faces. It’s just a horrible injury,” said Kent Emison, a Missouri, lawyer whose firm is considering a lawsuit against. Takata used an explosive chemical in its air bags, which would be the explosive mechanism for deploying inflators during a collision. However, the same chemical can explode unexpectedly when exposed to hot or humid air.

The results would see the inflator explode a metal canister and send shrapnel toward the driver and other vehicle occupants.

“Takata intends to try to use our bankruptcy laws to escape responsibility for the injured and the families of the dead,” said Bradford Child, a Los Angeles lawyer who represents the family of a woman killed by a ruptured inflator.