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Air bag liability claims force Takata to declare bankruptcy

Automobile design and manufacturing defects are common causes of injuries and death in Virginia and elsewhere. Manufacturers frequently spend large amounts of money defending liability claims that are based on these defects, but occasionally such efforts are unavailing. In one the largest products liability cases in recent times, air bag Takata Corp. has been forced to file bankruptcy because it faces overwhelming recall costs and liability for damages caused by its defective air bag inflators.

Air bags have been a common safety features in cars for the last thirty years. Takata, a manufacturer based in Japan, has sold millions of inflator mechanisms to 19 automobile manufacturers during this time. Unfortunately, Takata's air bag has a serious defect. Ammonium nitrate, the gas that is used to inflate the air bag in case of a collision, deteriorates over time if it is exposed to high heat and humidity. The deterioration causes the gas to expand too rapidly and with excessive force. The resulting explosion sends metal shards into the passenger compartment. The flying metal pieces have caused more than 180 serious injuries and at least 16 deaths. Many of these cases are still pending in the courts.

Takata announced that it will seek bankruptcy protection to give it time to sell most of its assets to Key Safety Systems, one of its competitors. Key will purchase the assets free from the claims of creditors and personal injury plaintiffs. Key is expected to pay nearly $1 billion for Takata's assets. Takata is already committed to using these funds to pay $850 million for recall costs, a fine of $25 million to the United States Justice Department and to use $125 million to establish a fund for victims.

Anyone who has been injured by or lost a loved one to an exploding air bag may wish to consult an experienced products liability lawyer. Such a consultation can provide a useful analysis of the law and facts that will govern the case and an estimate of the likelihood of recovering damages.

Source: Channel 13 WSET, "Takata files for bankruptcy, overwhelmed by air bag recalls," Tom Krisher and Marcy Gordon, June 25, 2017

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