WILMINGTON, Del (Reuters) - A lawyer for Takata Corp’s U.S. business, bankrupted by a recall of faulty air bags, indicated on Friday that the company is on the verge of receiving court approval for its reorganization and $1.6 billion sale of its non-air bag businesses.
At the start of a hearing in U.S. Bankruptcy Court in Wilmington, Delaware, lawyer Marcia Goldstein told the court that Takata’s U.S. unit had resolved nearly all objections to the reorganization.
“I would call it a largely consensual plan,” Goldstein, a Weil, Gotshal & Manges lawyer for Takata’s U.S. unit, said.
The judge will hear from some objectors before reaching any decision.
Takata and its U.S. unit, TK Holdings Inc, filed for bankruptcy last year in the wake of the largest automotive recall in history. The company’s air bags inflate with too much force and spray metal fragments. They have been linked to hundreds of injuries and at least 22 deaths.
As part of the company’s bankruptcy plan, automakers are contributing between $80 million and $130 million to help compensate those injured by Takata air bag inflators.
That agreement removed a major obstacle to the plan of reorganization by Takata’s U.S. unit and helps ensure the sale of Takata’s non-air bag inflator businesses to Key Safety Systems, a unit of China’s Ningo Joyson Electric Corp.
Goldstein said that the U.S. government’s Committee on Foreign Investment in the United States, or CFIUS, plans to complete its review of the sale by March 26.
To accommodate the CFIUS review, the U.S. Department of Justice extended to April 13 from Feb 27 its deadline for Takata to meet its obligations under a plea agreement, Goldstein told the court.
The plea agreement reached early last year requires Takata to provide a $850 million restitution fund for automakers, which have been saddled with tens of billions of dollars in recall-related costs, and $125 million for injured drivers.
The sale to Key Safety Systems will help provide the funds for the plea agreement.
A reorganized Takata will continue to provide automakers with replacement kits as tens of millions of recalled air bag inflators have yet to be replaced.
Reporting by Tom Hals in Wilmington, Delaware; editing by Grant McCool