Takata, injured drivers reach deal to end US bankruptcy
Takata, injured drivers reach deal to end US bankruptcy
The Japanese company’s air bags can explode with too much force and have been linked to at least 21 deaths and hundreds of injuries, prompting the largest recall in automotive history and forcing Takata and its US unit, TK Holdings, into bankruptcy.
The US unit was gearing up for a court fight starting on Tuesday to get approval for its plan to exit bankruptcy over the opposition of a committee for injured drivers and a separate committee of unsecured creditors.
But those two committees, automakers and Key Safety Systems, which is acquiring the viable business lines of Takata, reached a deal that resolves the biggest objections to the plan, according to court documents filed on Saturday.
Under the agreement, a trust will be established to pay compensation for those injured or killed by the air bags, which will be funded in part by automakers surrendering some of their claims against Takata.
The 13 automakers that joined the agreement include General Motors, Ford, Toyota, and the US affiliates of Honda and Volkswagen.
An amended plan of reorganization will be filed with the US Bankruptcy Court soon, according to Takata’s US unit.
Tuesday’s court hearing had been adjourned to Thursday at the earliest, Takata’s US unit said in court papers filed on Sunday.
A spokesman for the US unit and lawyers for the committee of injured drivers did not immediately respond to a request for comment.
The trust will pay compensation based on the injury, ranging from $10,000 for bruising to $5 million for death or loss of eyesight, according to court documents.
If the agreement is approved by the Bankruptcy Court in Wilmington, Delaware, injured drivers will be prevented from suing the automakers that joined the agreement.
A lawyer appointed to represent future injured drivers also joined the settlement, as did Key Safety Systems, a unit of China’s Ningo Joyson Electric Corp.
Key Safety Systems plans to acquire Takata’s viable operations for $1.6 billion. The proceeds will fund restitution claims for automakers and help pay injury claims as part of a plea deal with the US Department of Justice.
Brent oil trades near 4-year high, but US crude retreats
- The US will apply sanctions to halt oil exports from Iran, the third-largest OPEC producer, starting on November 4
- Brent is on course for its fifth consecutive quarterly increase, the longest such stretch for the global benchmark since early 2007
TOKYO: Brent crude was trading around its highest in nearly four years on Wednesday, while US crude futures fell as Washington tried to assure consumers that the market would be well supplied before sanctions are re-imposed on producer Iran.
Brent crude futures were up 10 cents, or 0.1 percent, at $81.87 a barrel by 0645 GMT, after gaining nearly 1 percent the previous session. Brent rose on Tuesday to its highest since November 2014 at $82.55 per barrel.
US crude futures were down 4 cents at $72.24 a barrel. They climbed 0.3 percent on Tuesday to close at their highest level since July 11.
The US will apply sanctions to halt oil exports from Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), starting on November 4. The pending loss of Iranian supply has been a major factor in the recent surge in crude prices.
US officials, including President Donald Trump, are trying to assure consumers and investors that enough supply will remain in the oil market while requesting producers raise their output.
“We will ensure prior to the re-imposition of our sanctions that we have a well-supplied oil market,” Washington’s special envoy for Iran, Brian Hook, told a news conference at the United Nations General Assembly on Tuesday evening.
In an earlier speech at the UN, Trump reiterated calls on OPEC to pump more oil and stop raising prices. He also accused Iran of sowing chaos and promised further sanctions on the country.
The so-called ‘OPEC+’ group, which includes the world’s biggest producer Russia, met over the weekend but did not see the need to add new output as the market is well-supplied currently.
“The lack of new production growth guidance by OPEC does not reflect a desire to let prices appreciate meaningfully further, but rather the historical pattern of OPEC responding to rather than front-running production losses,” Goldman Sachs said in a report.
“We continue to expect that the decline in Iran exports will reach 1.4 million barrels per day, and while it is occurring faster than we had previously expected, we continue to expect it to remain offset by a faster ramp-up in production from other producers.”
The investment bank reiterated its view that “Brent prices will stabilize back in their $70-80/bbl range into year-end.”
Brent is on course for its fifth consecutive quarterly increase, the longest such stretch for the global benchmark since early 2007, when a six-quarter run led to a record-high of $147.50 a barrel.
Meanwhile, in the US, the world’s biggest oil user, an industry report on Tuesday showed crude stockpiles unexpectedly climbed last week.
Crude inventories rose by 2.9 million barrels in the week to Sept. 21 to 400 million, compared with analyst expectations for a decrease of 1.3 million barrels, the American Petroleum Institute said.
Official figures on stockpiles and refinery runs from the US Department of Energy’s Energy Information Administration are due at 10:30 a.m. EDT (1430 GMT) on Wednesday.