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While Takata Corp.’s bankruptcy filing appears to have it on course to someday regain financial stability, questions remain about the turnaround as the company still faces potential additional costs from recalls and litigation.

Takata filed for bankruptcy protection Monday with liabilities estimated at well over ¥1 trillion, the largest bankruptcy by a Japanese manufacturer in the postwar period.

The auto parts supplier is in the midst of a global recall of faulty air bag inflators that have affected 42 million vehicles across 19 automakers and are linked to at least 11 deaths in the United States alone.

“Honestly, I still think things are going to be tough for Takata,” said Takeshi Miyao, an analyst at Tokyo-based market researcher Carnorama.

Automakers including Honda Motor Co. and Toyota Motor Corp. have been paying the costs to replace the inflators. The bankruptcy filing will likely leave most of the financial burden on them without getting much paid back by Takata.

Toyota and Honda said after Takata’s decision was announced that they may not be able to collect the money owed them. For Toyota the amount is ¥570 billion, while for Honda the figure is ¥556 billion. Takata said Monday it needs to proceed with restructuring to finalize its overall debt.

“It’s still unclear how much of those liabilities Takata will shoulder and meanwhile, there are still risks of litigation liabilities as well,” Miyao said.

U.S. auto safety regulators imposed a $200 million civil fine on Takata in 2015 for providing inadequate and inaccurate information to regulators about the defect. The air bag maker also agreed this year to pay $1 billion over its handling of the recall.

Among the various legal actions, the husband of a Malaysian doctor who was killed by metal shrapnel expelled from a defective air bag filed a wrongful death suit in the United States against Takata and Honda.

Under its restructuring plan, Takata selected U.S. auto parts maker Key Safety Systems Inc. to help it get through the costly restructuring process.

Takata will separate its healthy business units, including its seat belt and child seat operations, into a new company that Key Safety will buy for ¥175 billion. The recall-related liabilities will be shouldered by the remaining entity.

Takata had been seeking out-of-court proceedings in discussions with automakers in hopes of keeping its operations stable. The automakers were initially open to the plan but later shifted to court-led reforms to ensure a more transparent process of deciding how to split the monetary burden.

The remaining entity still faces the risk of going bankrupt in the future, Miyao said.

“Then Takata’s suppliers, especially smaller businesses, will not get their money back and litigation costs will not be paid,” he said.

Analysts also point out that since Key Safety Systems will buy the new entity, Takata air bags and seat belts are expected to be fully rebranded as the U.S. maker’s products.

But even if Takata will have to give up its brand, Miyao said that the worst-case scenario, where carmakers will have to halt production due to a disruption in the supply of air bags, will likely be avoided.

“Takata air bags have around a 20-30 percent share (of the market), which means if supply stops, the same amount of cars will not be produced … for carmakers, the restructuring plan was the only way to create a soft landing,” Miyao said.

Shintaro Niimura, an analyst at Nomura Securities Co., is taking an optimistic view of Takata’s future.

“A Japanese air bag maker is disappearing and Japanese carmakers will be losing a close partner … but I’m not worried about any negative impact on the auto industry,” Niimura said.

While the Takata brand name will be replaced, the infrastructure still exists and will continue to ensure a stable supply of air bags.

“I’m not expecting any trouble,” Niimura said.

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