Elpida foreign representative objects to liaison with Japanese court

By Jim Witters

Wilmington, Del., Oct. 12 - Elpida Memory, Inc.'s foreign representatives are objecting to a request by the informal group of Elpida bondholders for the appointment of a court representative to facilitate cooperation and direct communication with the Japanese court overseeing the foreign proceedings.

The foreign representatives, Yukio Sakamoto and Nobuaki Kobayashi, say that no such appointment is authorized and none is warranted, according to an Oct. 12 filing with the U.S. Bankruptcy Court for the District of Delaware.

The bondholders are irked over a lack of information about the proposed $2.5 billion sale of Elpida to Micron Technology, Inc.

On Sept. 19 they asked the court to appoint a liaison.

"The bondholders' demand cannot be justified upon the unfounded claim that additional cooperation and communication between the U.S. and Japanese courts are needed. This court is receiving regular updates regarding the Japan proceeding," the objection states.

"To the extent appropriate, Elpida's foreign representatives have already sought this court's approval of agreements approved by the Tokyo court that implicate assets within the territorial jurisdiction of the United States. Those assets are owned by the Japanese entity and held for the benefit of all of Elpida's creditors. This Chapter 15 case does not give U.S. creditors, or the bondholders, any priority rights in those assets," the representatives claim.

Additionally, a Sept. 18 order by judge Christopher S. Sontchi bars Elpida from taking "any action outside of the ordinary course of business with respect to such assets without notice or further order of this court," the objection states.

The foreign representatives say that the "real objective" of the bondholders is to obtain information for use in the Japan proceeding "on the argument that the Japanese reorganization process is different from the U.S. Chapter 11 regime."

The difference in procedures between the two nations does not provide grounds for the bondholders' request, the objection states.

A hearing on the request for a liaison is scheduled for 9 a.m. ET on Oct. 24.

Elpida, a Tokyo-based manufacturer of DRAM integrated circuits, filed for bankruptcy on March 19 to gain recognition of its Japanese proceedings. Its Chapter 15 case number is 12-10947.

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