Takata Picks a U.S.-Based Law Firm to Handle Sale Plan and Potential Bankruptcy

by San Antonio Attorney

Takata Corp., Japanese maker of air bag inflators, reportedly retained the services of a U.S. law firm to explore its options that may include a sale or bankruptcy.

The company triggered the largest recall in the history of the auto industry that could force it to file for bankruptcy for its unit in the United States, according to reports.

Takata employed the services of Weil Gotshal & Manges LLP, said the people familiar with the subject.  The Tokyo-based company has not made any final decisions and continues to look for buyers, the sources said.

Takata is considering about five offers as it faces the possibly gigantic price of recalling around 100 million defective air bag inflators around the world and suits related to at around 16 deaths and many injuries.  The faulty air bags have a propensity to deteriorate over time and blow up, shooting shrapnel through the cabin of the automobile.

Earlier this year, the automotive parts company signed up financial advisor Lazard Ltd.  to proceed with strategic options such as selling itself.  Each of the bidders has suggested filing for bankruptcy as one solution for Takata.  According to reports, some interested buyers are in fact insisting on the bankruptcy options.

More bids came from chemical company Daicel Corp., investment firm Bain Capital LP, private equity firm KKR & Co. and auto parts supplier Flex-N-Gate Corp., the source said.

Takata’s clients, such as Honda Motors, Volkswagen AG and General Motors Co., are going to be affected by the end result as they are also partially liable for massive recall costs and possible legal responsibilities.  Automakers are not keen on helping Takata with its legal expenses, yet they have to make sure that the air bags, seat belts and other auto parts are being manufactured.

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