Takata, the Japanese corporation at the heart of the auto industry’s largest ever product recall, has filed for Chapter 11 bankruptcy protection. The business supplied airbag inflators that, thanks to poor standards in the plant where they were manufactured, were faulty. The scandal forced a worldwide recall of more than 40 million vehicles and several deaths have been linked to the issue.
CNBC reports that the company has filed for Chapter 11 in Delaware and will do so in Japan, where it is also based, on Monday. There’s no detail about how much the business owes in fines, settlements and other costs, but a Japanese financial analyst puts the figure at around $15 billion. But a rescue plan has already been agreed, with the US-based company Key Safety Systems buying Takata for $1.6 billion.
It appears that the deal will see Takata, essentially, broken into two: a division that Key Safety will own, involving the “non-toxic” assets, and the airbag arm. The latter business will remain operating to replace the damaged airbag components in the recall, and will be wound down soon after work is completed.
Earlier this year, executives at Takata were indicted on charges that they knowingly falsified safety checks to hide the news that they were selling faulty airbags. The company admitted criminal wire fraud back in January, and was planning to pay $1 billion in fines for its wrongdoing.