Takata Suspends Stock Trading Ahead of Potential Bankruptcy Filing
The troubled air bag maker plans to file for bankruptcy prior to being sold off.
As word got out that Takata is preparing to file bankruptcy, all trades of it stock have been suspended. The move came after Nikkei Asian Review reported on plans for the company to file bankruptcy before being sold off.
According to the report, Key Safety Systems would buy out Takata for nearly $1.79 billion. Bain Capital would be assisting Key Safety Systems in raising the funds for the purchase. The buy-out would be officially done by a newly-formed company that would be shielded from all future liability related to the faulty airbags. Takata would then use that money to pay lawsuits, fines, and to reimburse automakers for the cost of the recall. Affected automakers have already reached an agreement to take on the financial burden of any further recalls related to the air bags.
Before the Key Safety Systems buyout, however, Takata would first reportedly have to file for bankruptcy protection. Only then will all parties be able to move forward with the plan. Reuters is reporting that negotiations of the deal have been on going for months. The Takata family, which controls 60 percent of the company would reportedly prefer a private restructuring—but the potential buyers, investors, and automakers are purportedly pushing for a court-ordered transparent process.
After the bankruptcy and sale, Key Safety Systems is likely to liquidate Takata's remaining assets. Besides air bags, the company also produces seat belts and child safety seats. A final decision on exactly what happens to Takata (and the timeline for those actions) isn't expected until the end of May.
- RELATEDRobert Mueller To Manage Takata Airbag Settlement FundsThe former FBI Director also recently acted as Settlement Master in several Volkswagen emissions suits.READ NOW
- RELATEDTakata Airbag Inflator Injury from Used PartsNot everyone gets their used parts from the dealer.READ NOW
- RELATEDTakata Fixes Taking Too Long — Ordered to Step Up by NHTSAThe airbag manufacturer's nightmare continues.READ NOW
- RELATEDTakata Pleads Guilty to Felony in $1 Billion Settlement"Destruction of the corporation would probably have been a fair outcome in this case," said the judge.READ NOW
- RELATEDLawsuit Claims Automakers Had Knowledge of Takata DefectsAnother big headline in the ongoing legal case.READ NOW