Privately-held TK Holdings and 11 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 17-11375. The Company, which is a global manufacturer of automotive safety components, is represented by Mark D. Collins of Richards, Layton & Finger.
Contemporaneously herewith, parent Takata Corporation and two of its Japanese subsidiaries, Takata Kyushi K.K. and Takata Service Corporation, commenced civil rehabilitation proceedings under the Civil Rehabilitation Act of Japan in the 20th Department of the Civil Division of the Tokyo District Court. In addition to the commencement of the Chapter 11 cases and Japanese proceedings, the Debtors intend to seek recognition of the Chapter 11 Cases in Canada as foreign main proceedings under Part IV of the Companies’ Creditors Arrangement Act, R.S.C. 1985, c.C-36, as amended.
According to documents filed with the Court, “Despite the many complexities, risks, and challenges that have resulted from such an unprecedented and highly publicized product recall, the Debtors are close to finalizing the terms of a global sale transaction with a potential purchaser – and with the support of a significant majority of their Customers – that will pave a path for a relatively quick and successful emergence of the Company’s business from restructuring. Specifically, after many months of negotiations, Takata (including the Debtors) is on the verge of executing a transaction with Key Safety Systems, Inc. (the ‘Plan Sponsor’) for the sale of substantially all of Takata’s global operations, which is expected to have the support of Customers that, in the aggregate, purchased approximately ninety percent (90%) of PSAN Inflators sold by Takata as of March, 2017 and hold a substantial majority of the total unsecured claims against the Debtors’ estates (the ‘Consenting OEMs’).”
In addition, “The commencement of the Chapter 11 Cases gives the Debtors a much needed breathing spell – one of the fundamental tenets of chapter 11 – and will allow the Debtors to finalize the Global Transaction Documents while also preserving global liquidity and ensuring the ongoing manufacture and supply of Component Parts, including replacement parts, to the OEMs.”
TK Holdings’ Chapter 11 petition indicates assets between $1 and 10 billion.
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