A group of 13 automakers will contribute about $130 million to compensate those injured by faulty Takata Corp air bag inflators as part of deal to solve the Japanese company’s bankruptcy, a U.S. plaintiffs’ attorney informed Reuters.
The agreement makes the way for the sale of Takata’s non-inflator business to Key Safety Systems (KSS) for $1.6 billion, helping to ensure a steady supply of automobile parts for the world’s biggest automakers.
Takata and its U.S. unit, TK Holdings Inc, filed for bankruptcy in 2017 following the world’s largest vehicle safety recall, set off by air bag inflators that can explode with extreme force, unleashing metal shrapnel inside automobiles and trucks.
Attorney Joe Rice of Motley Rice, who represents a number of personal injury plaintiffs in the bankruptcy, stated the deal, which was disclosed in court documents on Saturday, was focused on keeping Takata operations afloat so it could make replacement inflator kits.
Tens of millions of air bags with the inflators have been recalled but not yet changed.
In an interview this week, Rice stated the group of 13 automakers would contribute about $80 million to $130 million to Takata’s bankruptcy estate to help compensate the ones injured by the Takata inflators.
In return for the automakers’ contribution, a committee of injured drivers dropped their opposition to TK Holdings’ proposed bankruptcy exit plan. The plan will be presented to a U.S. judge on Friday for approval.
Victims of the defective inflators will also be able to collect from a different $125 million compensation fund developed as part of a plea offer Takata went into with the United States Department of Justice early in 2017. As part of that plea, automakers will get their share of an $850 million restitution fund.
Rice stated funds from the Justice Department settlement and the bankruptcy are most likely to fall short of full compensation for injured drivers, however they will still be able to take legal action against the vehicle manufacturers.
The one exception is Honda Motor, which accepted develop a trust to make sure injuries linked to its vehicles will be compensated completely, according to Rice. He stated Honda also will not object to fault for the injuries.
At least 22 deaths and hundreds of injuries in the world are connected to the Takata inflators.