NEW YORK – Takata Corp.’s U.S. unit has reached a settlement with representatives of those injured by lethally defective air bags, paving the way for the company to exit Chapter 11 bankruptcy and move forward with a reorganization plan, according to court documents.
The agreement between the Japanese auto parts supplier, injured drivers and creditors was outlined in documents filed in a Delaware bankruptcy court. Two groups representing people suing over the air bags have dropped their opposition to the restructuring plan, according to the documents filed on Saturday. Under the settlement, lawsuits will be resolved through a trust fund.
Takata was forced into bankruptcy amid lawsuits, multimillion-dollar fines and crushing recall costs involving the air bags. Key to the restructuring plan is the planned sale of most of its assets to a Chinese-owned rival for $1.6 billion.
Takata’s air bag inflators can explode with too much force, propelling shrapnel into drivers and passengers. At least 16 people have died and more than 180 have been injured due to the problem, which has touched off the largest series of automotive recalls in U.S. history. At least 42 million vehicles and as many as 69 million inflators have been recalled in the U.S. More than 100 million inflators have been recalled worldwide.
Thirteen automakers have joined the Delaware agreement, including General Motors and Ford Motor Co. and Toyota Motor Corp. The manufacturers, which are both Takata’s largest customers and its biggest creditors, are indemnified in their agreements with Takata from losses and liabilities related to the air bag inflators.
Takata will file an amended version of the reorganization plan in court, according to the documents.
A spokesman for Takata said the company had no comment on the settlement.