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Takata unit settlement cuts billions in airbag inflator defect claims
By Caroline Salls
Pittsburgh, March 28 – Takata Corp. subsidiary TK Holdings Inc. requested court approval of a settlement reached with Hawaii, New Mexico, the U.S. Virgin Islands and Puerto Rico to resolve consumer protection claims filed in connection with phase-stabilized ammonium nitrate (PSAN) airbag inflator defects, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.
TK Holdings said its Japanese debtors also reached a settlement with a tort claimants’ committee, a future claims representative and multi-district litigation plaintiffs.
The company said New Mexico filed a $1.4 billion claim, Puerto Rico filed a $1.9 billion claim, the Virgin Islands filed a $1.67 billion claim and Hawaii filed a $7 billion claim.
The states also filed claims in the company’s Japan proceedings, and $67.7 billion in intercompany claims were also filed in those proceedings.
Under the settlement agreement reached with the states, 80% of available funds in a resolution reserve will be paid to the states by the TK debtors, including a guaranteed $6.8 million. The states will also receive $200,000 in reimbursement of expenses.
Puerto Rico will receive a $100,000 settlement payment.
The states will receive a $9.26 million administrative claim in exchange for their claim filed in the Japanese proceedings.
TK Holdings is requesting an April 9 hearing.
Tokyo-based Takata manufactures and sells motor vehicle seat belts, airbags, steering wheels, interior trims and child restraint systems. TK Holdings filed for bankruptcy on June 25, 2017 under Chapter 11 case number 17-11375.
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