Hobbled by a deadly air bag scandal, Japanese auto supplier Takata filed for bankruptcy protection late Sunday as it continues to navigate the largest recall in U.S. history to fix a defect blamed for at least 16 deaths worldwide.

Crushed by more than $1 billion in penalties and costs associated with the scandal, the world’s second-largest air bag manufacturer was widely expected to enter bankruptcy in a bid to slash its debts and sell its assets to a rival supplier.

 

The company’s air bags are used on vehicles for nearly all of the world’s major automakers, affecting about one-quarter of all vehicles on the road in the U.S. as of two years ago, according to one estimate.

The air bags are prone to erupting — particularly after years of the ammonium nitrate propellant in their inflators degrading in warm, humid conditions — and hurling fiery shrapnel into drivers and passengers.

The recall of more than 42 million vehicles, which is expected to last through the end of the decade, will continue unabated. Automakers remain responsible for repairing the vehicles for free, generally beginning with the oldest models in the hottest climates.

The bankruptcy case also will not affect the $125 million victim compensation fund Takata established as part of its criminal settlement with the U.S. Justice Department. Those families will receive compensation through a program managed by Kenneth Feinberg, who also managed the 9/11 victim compensation fund and General Motors ignition-switch fund.

Related:

Timeline: How Takata’s air bag scandal unfolded

Preview: What to expect in Takata’s bankruptcy

Takata recently…