As auto supplier Takata Corp. prepares for a possible U.S. bankruptcy filing, potential bidders are poring over a recent U.S. court ruling that could expose a buyer to liability for the company's defective air bags, sources have told Reuters. Takata faces potentially billions of dollars in costs from the world's largest automotive recall, stemming from millions of its air bags that were equipped with malfunctioning inflators. The Japanese company has said that it is seeking a financial backer. But interested bidders, if the parts maker goes up for sale, want Takata to put its U.S. business into bankruptcy first. General Motors filed for chapter 11 in 2009, selling its best assets to "new GM," scrubbed free of billions of dollars of debt, which enabled the company to withstand an economic crisis. In July, the U.S. Court of Appeals for the Second Circuit held that General Motors Co., the "new GM," could be sued over faulty ignition switches made by "old GM." "What that says to me: buyer beware," said Henry Jaffe of Pepper Hamilton in Wilmington, Del., who represents debtors and creditors. Jaffe, who took part in a special abiLIVE webinar with Greenberg Traurig, LLP’s John Hutton to examine the ruling, said that the Second Circuit’s decision could undercut what bidders are willing to pay for Takata. Read more.
Click here to watch the abiLIVE webinar. http://cle.abi.org/product/no-cle-abi-live-2nd-circuit-decision-gm-incr…
