WILMINGTON, Del.—Takata Corp.'s bankruptcy estate seeks at least $7.5 million in a federal lawsuit against airbag inflator supplier ARC Automotive Inc., accusing the supplier of selling defective parts that triggered a major General Motors safety recall.
According to the complaint, filed June 24, the reorganized TK Holdings Trust claims that ARC Automotive in Wilmington, Del., breached a contract in which the supplier agreed and warranted that the inflators would be free from defects. Takata's bankruptcy estate was formed after the approval of Takata parent TK Holdings Inc.'s Chapter 11 reorganization plan and sale in February 2018. The Japanese supplier filed for bankruptcy in June 2017 and in 2018 its safety product business was acquired for $1.6 billion by Chinese-owned Key Safety Systems, which has since renamed the business Joyson Safety Systems.
Takata's defective airbag inflators prompted the largest recall in global automotive history, forcing 19 auto makers to recall some 100 million airbags worldwide. At least 24 fatalities and about 290 injuries globally have been linked to Takata's inflators, which exploded during accidents and spread shrapnel into passenger compartments. U.S. auto makers and regulators have been working for several years to get all affected airbags recalled and replaced.
The Takata estate claims that ARC's defective inflators caused its customer, GM, to recall vehicles made during the period the defective inflators were supplied by ARC.