Elpida Seeks U.S. Protection During Japanese Bankruptcy
Elpida Memory Inc. (6665), the last Japanese maker of computer-memory chips, sought protection from creditors in the U.S. as it pursues a bankruptcy case in Japan.
The Tokyo-based chipmaker filed court papers today in U.S. Bankruptcy Court in Wilmington, Delaware, listing more than $1 billion in assets and debt. It asked the court to recognize the Japanese case as the main bankruptcy proceeding.
Chapter 15 of the bankruptcy code allows foreign companies reorganizing abroad to protect their assets from creditors and lawsuits in the U.S.
Elpida last month filed the biggest Japanese bankruptcy in more than two years, after semiconductor prices fell and it failed to obtain a second government bailout. The company, which makes dynamic random access memory, or DRAM, chips, listed debt of about 448 billion yen ($5.4 billion) in a Feb. 27 filing with Japan’s finance ministry.
“This Chapter 15 case is being filed in an effort to maximize recoveries to, and provide for an equitable distribution of the value among, all creditors,” the company said in court papers.
The chipmaker seeks to protect the stock of its Elpida Memory USA Inc. unit, accounts receivables held at the unit totaling 5.8 billion yen ($69.5 million), as well as patents registered in the U.S.
“The enjoining of certain ongoing litigation to which Elpida is a party and the protection of Elpida’s U.S. assets in conjunction with the protections afforded by the Japan proceeding is essential to this effort,” the company said.
Elpida was formed through the 1999 merger of NEC Corp.’s and Hitachi Ltd.’s memory businesses. Elpida employed 5,898 people as of March 31, according to data compiled by Bloomberg.
The case is In re Elpida Memory Inc., 12-10947, U.S. Bankruptcy Court, District of Delaware (Wilmington).
To contact the reporter on this story: Michael Bathon in Wilmington, Delaware, at firstname.lastname@example.org.
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