People with injuries or economic damage from Takata Corp.-made air bags will get a fraction of a penny for each dollar they are owed, under a U.S. chapter 11 bankruptcy plan unveiled this week, WSJ Pro Bankruptcy reported. The bankruptcy payment plan for Takata’s U.S. unit sets out a system for distributing the beleaguered company’s assets, including a share of cash from the $1.6 billion sale of the non-air bag businesses to Key Safety Systems Inc. Money from the Key sale won’t go far to address the billions of dollars of damages stemming from Takata’s potentially defective air bags, court papers indicate. Takata U.S.’s chapter 11 plan estimates personal-injury and wrongful-death damages alone will top $1 billion. Add to that economic losses such as the cost of renting vehicles while air bags are replaced, and the money spent by car makers cleaning up after Takata’s defective parts, and the bankruptcy payout falls billions of dollars short of covering the damage from the defective parts. An official overseeing a massive recall of the dangerous safety devices, John Buretta, reported in November that the “words ‘grenade’ and ‘ticking time bomb’ accurately convey the lethal potential” of Takata air bags installed in millions of vehicles around the world.
