Plaintiffs attorneys in the Takata air bag multidistrictlitigation said Monday they don't expect its bankruptcy filing toaffect the proceedings against automakers, including four that haveagreed to settle.
Takata Corp. automatically gains a litigation stay under thebankruptcy filings in Tokyo and the U.S., but the filingsthemselves have been anticipated for so many months that theyalready have been factored into the litigation before U.S. DistrictJudge Federico Moreno in Miami.
"We do not expect a Takata bankruptcy to have an impact onclaims pending against auto manufacturer defendants for their rolein the air bag scandal," Peter Prieto, the court-appointed chairlead counsel for the MDL consumer plaintiffs, said in a statement."We will continue fighting for our clients and prosecuting claimsagainst Honda, Ford, Nissan, as well as Takata, to make sure allaffected consumers receive the recourse they deserve."
BMW, Mazda, Subaru and Toyota received preliminary approval June12 for consumer settlements valued at $553 million when they wereannounced in May. A hearing for final approval is set for Oct.25.
The settlements "will accelerate the removal of dangerous airbag inflators from 15.8 million vehicles and compensate consumersfor economic losses associated with the recall," said Prieto, apartner with Podhurst Orseck in Miami.
The proposed settlements aims to help speed up repairs bycreating an independent outreach program and compensate classmembers who claimed the recalls cost them money by lowering theresale values of their cars, forcing them to miss work for repairsand otherwise inconveniencing them.
Takata has agreed to a $1.6 billion takeover of most assets byDetroit-based competitor Key Safety Systems, a subsidiary ofChina's auto parts supplier Ningbo Joyson Electronic Corp., underthe prepackaged bankruptcy filing. Some of the proceeds will beused to reimburse automakers who bought the defective parts. KeySafety would avoid liability for Takata's air bags.
But bankruptcy attorney Charles Tatelbaum, who is not involvedin the Takata case, warned there could be a trickle-down effectcausing a slowdown in the auto industry with replacement air bagsstill in short supply. He cited the 2005 bankruptcy of auto partssupplier Delphi and the consequences of the largest U.S. auto partsmaker seeking Chapter 11 protection.
"You could wind up with shortages like Nissan, Toyota and Hondacould see a slowdown," said Tatelbaum of Tripp Scott in FortLauderdale. Seat belts and air bags will be needed "for recall andnew vehicles as well. How many can they make?"