Takata subsidiary executive retiree benefits settlement OK’d by court

By Caroline Salls

Pittsburgh, Feb. 1 – Takata Corp. subsidiary TK Holdings Inc. received court approval of a settlement under which it will stop providing retiree benefits to seven executives, according to an order filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

TK Holdings said the executives have agreed to waive their rights to receive retiree benefits, withdraw from the executive healthcare plan administered by Blue Cross Blue Shield and release any claims they may have in exchange for a lump-sum payment to be made within 30 days of the entry of an order approving the settlement.

The settlement also authorizes the company to terminate or cease providing retiree benefits to all former executives.

According to the motion, the seven covered executives are the only ones of 17 former executives who are entitled to the protections afforded by section 1114 of the Bankruptcy Code. TK Holdings said eight of the other executives are not covered because they earned income that exceeded $250,000 during the one-year period leading up to the bankruptcy filing, one was never an employee of the TK debtors and received retiree benefits under a consulting contract only, and the other non-covered executive was receiving health benefits under a separation agreement that expired on Oct. 31.

TK Holdings said it estimated the total present value of the claims for all seven of the covered executives to be $3.1 million.

The total cost to the TK Holdings estates under the settlement will be $395,000, the motion said.

Tokyo-based Takata manufactures and sells motor vehicle seat belts, airbags, steering wheels, interior trims and child restraint systems. TK Holdings filed for bankruptcy on June 25, 2017 under Chapter 11 case number 17-11375.

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