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Japan's Takata files another attempt to stay U.S. air bag lawsuits

Reuters  |  WASHINGTON 

By David Shepardson

(Reuters) - Japanese auto supplier Corp filed for U.S. protection on Wednesday in an effort to pause lawsuits against the company over faulty air bag inflators - more than a month after its U.S. unit filed for in the same

In its filing with the U.S. in Delaware, said the Chapter 15 petition was critical to ensure the "continuation of Takata's business, preserving tens of thousands of jobs and ensuring that Takata's business partners continue to have access to critical components that ensure the safety of drivers worldwide."

The petition came as Takata's U.S. business separately asked a federal judge to suspend lawsuits against automakers that have been brought by air bag victims.

Major automakers including BMW AG , Ford Motor Co , Honda Motor Co Ltd <7267.T> and Toyota Motor Corp <7203.T> sided with in backing a six-month delay in lawsuits.

and automakers face hundreds of lawsuits including actions brought by Hawaii, the U.S. Virgin Islands, and New Mexico.

TK Holdings Inc, the company's primary U.S. unit, filed for Chapter 11 protection in June along with 11 other U.S. and Mexican entities, coinciding with Corp's filing in

said it faces tens of billions of dollars in liabilities from its inflators, which are subject to the biggest recall in automotive history.

At least 18 deaths and 180 injuries worldwide have been tied to a defect that can cause inflators to explode with excessive force, unleashing metal shrapnel inside cars and trucks. has said it expects 125 million vehicles worldwide to be recalled by 2019..

automatically stayed hundreds of lawsuits against TK Holdings for wrongful death, injuries, economic loss and breach of consumer protection laws, and in July Takata's U.S. unit sought a preliminary injunction to suspend lawsuits against automakers that use its inflators.

The Chapter 15 filing seeks to stay suits against Corp as well. An initial hearing on the new petition is set for Friday.

Plaintiffs' lawyers called the requested injunction "an abuse of the laws for the benefit of all of the world's largest automobile manufacturers." They said Takata's request would delay consideration of plaintiff's lawsuits for six months or more.

set aside $125 million to compensate those injured by its air bags as part of a guilty plea, but plaintiffs' lawyers argue it will not be enough.

Without the injunction, said the litigation would distract management from completing the $1.6 billion sale of its viable operations to Key Safety Systems (KSS) and could threaten the supply of air bag inflators to replace recalled ones.

said Wednesday it is in talks to finalise the terms of the agreements regarding the KSS asset sale "and with the support of a significant majority" of automakers "that will pave a path for a relatively quick and successful emergence" from restructuring. It hopes to complete the restructuring by the end of February.

(Reporting by David Shepardson Additional reporting by Jonathan Stempel in New York; Editing by Tom Brown)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, August 10 2017. 02:20 IST