Creditors Get Green Light to Vote on Takata's Bankruptcy Plan
Auto supplier's Chapter 11 proposal could limit consumers' claims related to defective and deadly airbags, critics say.
A federal judge has given the go-ahead to auto supplier Takata's creditors to vote on the bankrupt company's Chapter 11 plan, which could curb claims related to its potentially fatal airbags, according to published reports.
The Japanese-based Takata filed for bankruptcy in June amid a massive recall of its defective airbags, which can explode and spew metal shards. The airbags have been linked to nearly 20 deaths around the globe, including a man in Louisiana during the summer.
During a hearing on Wednesday, the judge considered disclosures by Takata's U.S. entity, TK Holdings, which detailed the company's proposed reorganization plan, Reuters reported.
The company's plan is more favorable to automakers than car owners, critics say, as it would establish a trust to compensate those injured by the airbags, but prevent lawsuits against automakers who contribute to the trust arrangement, according to the wire service.
A hearing is scheduled for Feb. 13 in Wilmington, Delaware, to determine whether the proposal is equitable and meets other legal requirements.
Takata has agreed to sell what remains of its operations to Key Safety Systems for $1.6 billion.
Separately, local newspaper Columbia Basin Herald on Thursday reported that as many 65 employees may have been laid off by Takata at a facility in Moses Lake, Washington, where about 350 were employed.