A U.S. bankruptcy judge yesterday granted formal recognition to Takata Corp.’s Japanese court restructuring proceeding, a step forward for the company as it works to address massive damage claims tied to defective air-bag parts, WSJ Pro Bankruptcy reported. The auto-parts maker filed for court protection from creditors in the U.S. and in Japan in June after being swamped with litigation over air-bags that deployed with explosive, sometimes deadly, force. As of the bankruptcy filing, at least 16 deaths and more than 180 injuries were linked to the defect. Yesterday’s hearing in the U.S. Bankruptcy Court in Wilmington, Del., was a pivotal moment for the Japanese company, which is selling much of its business to appease creditors. A lot of the money from the $1.58 billion sale will be routed to the Japanese parent, and then to the U.S. Justice Department to pay $850 million owed on a settlement of a criminal case. That cash will go to car makers that have been footing the bill for the largest recall effort in U.S. automotive history.
