Airbag manufacturer Takata is expected to file for bankruptcy protection according to the Nikkei Asian Review. This follows the world’s largest automotive safety recall caused by the company’s defective inflators, which saw the Japanese manufacturer of automotive safety components plead guilty to criminal wrongdoing and agree to pay US$1 billion in settlement.

Now, Takata’s liabilities are seen to exceed 1 trillion yen (RM38.4 billion) following the global recall of defective airbag inflators, which as of October 2016 have been linked to 11 deaths in the United States alone, plus several cases in Malaysia.

For now, automakers have taken on the burden, as Takata says it cannot determine where the fault for the defect lies, and is unable to make “a reasonable estimate of the costs likely to be borne by the group.” Key Safety Systems, owned by Ningbo Joyson Electronic of China, will foot the bill for Takata’s recovery process.

A new company under Key Safety has been created to purchase Takata operations for 180 billion yen (RM6.9 billion), and will continue to supply airbags, seatbelts and other related products. The by-then-downsized Takata will remain responsible for recall-related liabilities, and its creditor banks will continue to give financial assistance to help with supplier payments and delivery of products to clients.

Takata’s founding family originally favoured an out-of-court settlement with creditors for its core Japanese unit, but the company would eventually face bankruptcy due to damages paid out to victims of the defective airbags, the report said. Its car manufacturer clients insisted on a court-mediated process to avoid the eventuality, and for a recovery to be more likely.