Takata Enlists Restructuring Lawyers in the Face of Massive Recalls
Takata Corporation has enlisted restructuring lawyers amid massive recalls involving millions of vehicles equipped with the companies faulty airbags that can rupture and cause fatal injuries to vehicle occupants. According to a news report in The Wall Street Journal, the Japanese automotive supplier is working with restructuring lawyers, seeking counsel on looming uncertainties over costly recalls of defective airbags, which have been linked to 10 deaths and dozens of injuries around the world.
Takata’s use of this law firm is significant because its practice is usually enlisted to help execute deals stemming from major corporate troubles. The same law firm represented General Motors during its $50 billion government rescue and bankruptcy restructuring. The law firm has represented companies in five of the six largest bankruptcies in U.S. history including the collapse of the Lehman Brothers Holdings, which helped trigger the financial crisis.
So far, 14 automakers are recalling about 24 million vehicles in the U.S. that have been equipped with Takata airbags. The inflators in these airbag mechanisms can malfunction and explode with too much force spraying shrapnel into the vehicle compartment, causing serious injuries or even fatalities. More than 60 million vehicles have been recalled worldwide due to this major safety problem and federal regulators are looking at tens of millions of vehicles that still need to be recalled.
The company is also looking at hefty government fines and a criminal investigation for failing to alert regulators about the defective airbags, which is legally required. Eventually, Takata must recall all airbags that use ammonium nitrate as a propellant in the airbags until it can prove that the chemical is safe for use in the airbag inflators.
Protecting Consumers’ Rights
It is important that consumers who have been affected by these defective vehicles understand their legal rights and options. If you or a loved one has been injured by a defective Takata airbag, you can seek compensation for damages by filing a product liability claim. Families of deceased victims can also seek compensation by filing a wrongful death claim. If you own a vehicle that is equipped with a Takata airbag, it would be in your best interest to ensure that it is safe to operate. Check if your vehicle is included in a recall by visiting safercar.gov and entering your vehicle identification number or VIN.