Will Takata Bankruptcy Leave Consumers Holding the Bag – Recalled Air Bag
Nearly a decade ago, Clark Fountain, whose auto products liability experience is among the most significant in the country, handled a case where a client presented with a very unusual injury from a relatively minor car accident in her Honda. After a thorough investigation, the firm presented its exploding airbag claim to Honda who was very quick to settle the case, and insisted on confidentiality. Soon after, they learned why; the auto giant launched a recall just days later.
The firm later realized that they been among the first to uncover what would lead to one of the largest recalls in United States automotive history at a staggering 34 million vehicles to date and growing, including other manufacturers who have initiated their own recalls of the now infamous Takata airbag inflator discussed above.
As Takata continues to begrudgingly acknowledge its defective product by expanding the recall population, the financial burden is beginning to take its toll on the company. The recall involves over 70 million actual inflators with an expected replacement date of 2019. Market estimates put the recall costs on Takata at approximately $10 billion.
As a result, Takata is being forced to begin selling off portions of its business. Recently released information uncovered that five companies seeking to bail Takata out have presented restructuring plans requiring Takata to file for bankruptcy protection. Many of Takata’s creditors, which include major automobile manufacturers such as Honda, Toyota, General Motors, Volkswagen, and Chrysler, are all likely to be opposed to such a move. Market estimates suggest that Takata’s current capital would be exceeded by its debt if it had to cover most or all of the recall costs.
Needless to say, the future of Takata and the financing of the 70 million airbag recalls remains unclear, as does their ability to properly compensate victims who have been injured or killed due to defects with their airbags. For more information about the recall, or if you think you may have a personal injury or wrongful death claim due to a defective airbag, please contact attorneys Don Fountain or PooradRazavi by calling the firm at 561-899-2100.