DEALS | Mon Jun 26, 2017 | 11:11am EDT

Japanese airbag maker Takata files for bankruptcy, gets Chinese backing

By Naomi Tajitsu and David Shepardson | TOKYO/WASHINGTON

Japan's Takata Corp (7312.T), at the center of the auto industry's biggest-ever product recall, filed for bankruptcy protection in the United States and Japan, and said it had agreed to be largely acquired for $1.6 billion by the Chinese-owned U.S.-based Key Safety Systems. In the biggest bankruptcy of a Japanese manufacturer, Takata faces tens of billions of dollars in costs and liabilities resulting from almost a decade of recalls and lawsuits. Its airbag inflators have been linked to at least 16 deaths and 180 injuries around the world because they can rupture and send metal fragments flying. TK Holdings, its U.S. operations, filed Chapter 11 bankruptcy in Delaware on Sunday with liabilities of $10 billion to $50 billion, while the Japanese parent filed for protection with the Tokyo District Court early on Monday.

Scott Caudill, chief operating officer of TK Holdings, said in a court affidavit that the company "faces insurmountable claims" relating to the recalls and owes billions of dollars to automakers. He disclosed that Takata has recalled, or expects to recall, by 2019 about 125 million vehicles worldwide, including more than 60 million in the United States.

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