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(the Motion):
Relief Requested
United States Code (the Bankruptcy Code), the Debtors request that the Bankruptcy
Court (the Court) enter an order, substantially in the form annexed hereto as Exhibit A
(the Proposed Order), appointing Roger Frankel (Mr. Frankel) as the legal
1
The Debtors in these chapter 11 cases, along with the last four digits of each Debtors federal tax
identification number, as applicable, are: Takata Americas (9766); TK Finance, LLC (2753); TK China,
LLC (1312); TK Holdings Inc. (3416); Takata Protection Systems Inc. (3881); Interiors in Flight Inc.
(4046); TK Mexico Inc. (8331); TK Mexico LLC (9029); TK Holdings de Mexico, S. de R.L. de C.V.
(N/A); Industrias Irvin de Mexico, S.A. de C.V. (N/A); Takata de Mexico, S.A. de C.V. (N/A); and
Strosshe-Mex, S. de R.L. de C.V. (N/A). Except as otherwise set forth herein, the Debtors international
affiliates and subsidiaries are not debtors in these chapter 11 cases. The location of the Debtors corporate
headquarters is 2500 Takata Drive, Auburn Hills, Michigan 48326.
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described below (the Future Claimants Representative), nunc pro tunc to July 20,
2017.
Jurisdiction
28 U.S.C. 157 and 1334, and the Amended Standing Order of Reference from the
United States District Court for the District of Delaware, dated February 29, 2012. This
the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy
Court for the District of Delaware (the Local Rules), the Debtors consent to the entry
of a final order by the Court in connection with this Motion to the extent that it is later
determined that the Court, absent consent of the parties, cannot enter final orders or
judgments consistent with Article III of the United States Constitution. Venue is proper
Background
commenced with this Court a voluntary case under chapter 11 of the Bankruptcy Code.
The Debtors continue to operate their businesses and manage their properties as debtors
in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. On July 7,
2017, the United States Trustee for Region 3 filed notices appointing the statutory
Code (Creditors Committee) and the statutory committee of unsecured tort claimant
procedural purposes only pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy
the Chapter 11 Cases, Takata Corporation, the Debtors ultimate corporate parent
(TKJP and, together with its direct and indirect global subsidiaries, including TKH,
Takata), together with 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. On June 28,
2017, the Debtors also commenced an ancillary proceeding under the Companies
Creditors Arrangement Act (Canada), R.S.C. 1985, c. C-36 as amended (the CCAA) in
the Ontario Superior Court of Justice (Commercial List) (the Canadian Court) in
Ontario, Canada.
businesses and capital structure is set forth in the Declaration of Scott E. Caudill in
Support of Debtors Chapter 11 Petitions and First Day Relief, dated June 25, 2017
2
Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in
the Caudill Declaration.
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future claims representative to protect the interests of future claimants in chapter 11. See
e.g., In re Motors Liquidation Company, No. 09-50026 (Bankr. S.D.N.Y. April 8, 2010)
(granting, pursuant to sections 105(a) and 1109, the debtors motion to appoint a future
claimants representative to resolve future asbestos claims outside of the section 524(g)
framework); In re Met-Coil Sys. Corp., No. 03-12676, (Bankr. D. Del. Oct. 20, 2003)
holders of claims related to pre-confirmation nexus with the debtor, the largest framing
04-37154 (Bankr. D. Ore. Dec. 20, 2004) (granting, pursuant to section 327 of the
manufacture and sale of certain airbag inflators. The rupture of certain Takata-
and several major original equipment manufacturers (OEMs) to take actions to initiate
wide-ranging recalls of vehicles in the U.S. and overseas. After commissioning three
root cause of the ruptures, NHTSA concluded that at some point in the future, all non-
Case 17-11375-BLS Doc 288 Filed 07/20/17 Page 5 of 13
desiccated frontal Takata PSAN Inflators will reach a threshold level of degradation that
could result in the inflator becoming unreasonably dangerous. Takata also recently filed
with NHTSA, Defect Information Reports relating to PSAN inflators in the United States
that were desiccated with calcium sulfate. As a result, in addition to facing significant
without limitation, personal injury and wrongful death claims, economic loss class action
claims, and deceptive trade practice claims brought by various state governmental
agencies, the Debtors anticipate there will be additional claims of this nature asserted in
the future.
related liability. Accordingly, the Debtors intend to focus their efforts on negotiating,
and ultimately obtaining approval of, a plan of reorganization that would, among other
things, channel personal injury and wrongful death claims relating to the Debtors pre-
between the interests of current claimants and the Future Claimants; i.e., the desire of
current claimants to receive the maximum satisfaction on account of their current claims
now versus the preference of Future Claimants to preserve a portion of the Debtors
assets in order to satisfy their future personal injury claims. Accordingly, to ensure that
Future Claimants are adequately and fairly represented, the Debtors request that Mr.
independent fiduciary to represent and protect those claimants interests with regard to
the treatment of future personal injury and wrongful death claims in the Debtors
reorganization proceedings.3
12. The Debtors, with the assistance of their counsel, have evaluated
Debtors have determined, in their sound business judgment, that Mr. Frankel is well-
13. As set forth in the Frankel Declaration, Mr. Frankel has extensive
experience in the field of mass tort bankruptcy matters and has served as a future
claimants representatives.
Law School. He has practiced in the areas of business reorganization and creditors rights
since 1972. For the past seventeen years, Mr. Frankel has represented clients in
connection with complex, mass tort related bankruptcy cases, including representing
other cases. He was appointed by the United States Bankruptcy Court for the District of
Delaware as the Legal Representative for holders of future personal injury asbestos
3
For the avoidance of doubt, nothing in this Motion should be construed to imply that the personal injury
or wrongful death claims of the Future Claimants are not claims as defined in the Bankruptcy Code
section 101(5).
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claims in the Chapter 11 cases of W.R. Grace & Co., et al., Case No. 01-01139 (Bankr.
D. Del.) and now holds that position with the trust established pursuant to the confirmed
plan in those cases. Id. at 6(a). He also serves as the Legal Representative for holders of
future personal injury asbestos claims with respect to the trust established pursuant to the
confirmed plan in Combustion Engineering, et al., Case No. 03-10495 (Bankr. D. Del.).
Id. at 6(b).
16. Mr. Frankel is a founding partner in the law firm of Frankel Wyron
LLP. Id. at 1. Previously, Mr. Frankel was a partner at Orrick, Herrington & Sutcliffe
LLP (Orrick) and co-chair of Orrick's Global Restructuring Group. Id. at 5. As noted
above and in the Frankel Declaration, Mr. Frankel has served as legal counsel to future
experience and involvement with mass tort related personal injury claims in
other chapter 11 cases, make him well qualified to competently and effectively
C. Disinterestedness
18. To the best of the Debtors' knowledge, and as described more fully
in the Frankel Declaration, Mr. Frankel is a "disinterested person" within the meaning of
section 101(14) of the Bankruptcy Code and as required by section 327(a) of the
Bankruptcy Code and referenced by section 328(c) of the Bankruptcy Code. Mr. Frankel
holds no interest adverse to the Debtors or their estates for the matters for which he
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would be employed. Additionally, Mr. Frankel has no connection, other than that
disclosed above and in the Frankel Declaration, to the Debtors, their creditors, or any
19. The Debtors request the entry of the Order appointing Mr. Frankel
have standing under section 1109(b) of the Bankruptcy Code to be heard as a party-in-
interest in all matters relating to the Debtors Chapter 11 Cases, and shall have, inter
alia, the powers and duties of a committee, which powers and duties may be modified
Representative may employ attorneys, and other professionals, consistent with section
1103 of the Bankruptcy Code. All attorneys who have been or are hereafter retained
pursuant to sections 327 or 1103 of the Bankruptcy Code (i) shall apply for
incurred in connection with the Debtors chapter 11 cases in compliance with sections
330 and 331 of the Bankruptcy Code and applicable provisions of the Bankruptcy Rules,
Local Rules and any other applicable procedures and orders of the Court, and (ii) intend
to make a reasonable effort to comply with the U.S. Trustees requests for information
and additional disclosures as set forth in the Guidelines for Reviewing Applications for
Representative and his professionals from the Debtors estates, subject to approval by
this Court and subject to the Bankruptcy Code, the Bankruptcy Rules, and the Local
Rules and Orders of this Court entered in these Chapter 11 cases. The Debtors and Mr.
Frankel have agreed, subject to this Courts approval, that Mr. Frankel shall be
compensated at the rate of $995 per hour (subject to adjustment as provided in the
Frankel Declaration).
The Future Claimants Representative shall not be liable for any damages, or have any
obligations other than as prescribed by Orders of this Court; provided, however, that the
Future Claimants Representative may be liable for damages caused by his willful
liable to any person as a result of any action or omission taken or made by the Future
Claimants' Representative in good faith. The Debtors shall indemnify, defend and hold
the Future Claimants' Representative and his agents and professionals harmless from any
claims by any party against the Future Claimants Representative arising out of or
provided however, that the Future Claimants Representatives (and his agents and
jurisdiction determines pursuant to a final and order no longer subject to appeal that the
misconduct or gross negligence. If, before the earlier of: (i) the entry of an order
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confirming a chapter 11 plan in these Chapter 11 Cases (that order having become a
final order and no longer subject to appeal), and (ii) entry of an order closing these
including without limitation the advancement of defense costs, the Future Claimants
Representative must file an application therefor in this Court, and the Debtors may not
pay any such amounts to the Future Claimants Representative before the entry of an
order by this Court approving such payment. The preceding sentence is intended to
specify the period of time during which this Court shall have jurisdiction over any
request for fees and expenses by the Future Claimants Representative for
the Debtors' obligation to indemnify the Future Claimants Representative. In the event
that a cause of action is asserted against the Future Claimants Representative arising out
Future Claimants Representative shall have the right to choose his own counsel.
Representative and his counsel shall be entitled to receive all notices and pleadings
which are served upon the Committees and their respective counsel pursuant to the
Bankruptcy Code, the Bankruptcy Rules, and any and all orders entered in these Chapter
11 Cases, including, without limitation any and all orders authorizing the Debtors to
Mr. Frankel and the terms of his compensation are fair and reasonable. In addition, such
appointment will assure that the interests of Future Claimants are appropriately
represented and should serve to expedite the proper administration of these estates.
Appointment of the Future Claimants Representative Nunc Pro Tunc to the July
20, 2017
be made effective nunc pro tunc to the date this Motion is filed so that Mr. Frankel may
be compensated for the services he provides before this Motion is decided by the
Court. It is well established that a bankruptcy court has the power to grant retroactive
Co., Inc., 798 F. 2d 645, 648 (3d Cir. 1986); In re Primary Health Sys. Inc., 2002 WL
500567 (D. Del. Mar. 28, 2002). In determining whether the court should exercise its
discretion to grant retroactive approval, the bankruptcy court must find that it would have
granted prior approval pursuant to the relevant requirements, and may consider additional
factors such as: (1) whether the professional was under time pressure to begin service
without approval; (2) the amount of delay; and (3) the extent to which compensation to
the professional will prejudice innocent third parties. In re Arkansas Co., Inc., 798 F. 2d
at 650.
Representative nun pro tunc to the date this Motion is filed is warranted here. No
legitimate basis would be served by delaying Mr. Frankels work until his engagement is
approved. Indeed, it is critical that Mr. Frankel immediately become familiar with the key
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issues in this case and retain the necessary professionals to carry out his work. Finally, no
party in interest will be prejudiced by the granting the appointment nunc pro tunc.
Notice
23. Notice of this Motion has been provided to (i) the Office of the
United States Trustee for the District of Delaware (Attn: David Buchbinder, Esq. and
Jane Leamy,Esq.); (ii) the Securities and Exchange Commission; (iii) the Internal
Revenue Service; (iv) the Offices of the United States Attorney for each of the District of
Delaware and the Eastern District of Michigan; (v) NHTSA; (vi) each of the Consenting
OEMs; (vii) the Plan Sponsor; (viii) counsel for each of the Committees; and (ix) all
parties who have requested service of notices in these Chapter 11 Cases pursuant to
Bankruptcy Rule 2002. The Debtors submit that such notice is sufficient under the
circumstances.
No Previous Request
24. No previous request for the relief sought herein has been made by
Order granting the relief requested herein and such other and further relief as the Court
-and-