Elpida Memory seeks U.S. recognition of Japanese insolvency proceeding

By Caroline Salls

Pittsburgh, March 19 - Elpida Memory, Inc. made a Chapter 15 bankruptcy filing on March 19 in the U.S. Bankruptcy Court for the District of Delaware to gain U.S. recognition of its Japanese insolvency proceeding.

"Pending an order for the commencement of reorganization proceedings and until approval of its reorganization plan, Elpida requires the protection under Chapter 15 of its valuable assets in the United States," foreign representative Yukio Sakamoto said in a statement filed with the court.

Sakamoto said the U.S. assets in question include the stock of direct subsidiary Elpida Memory (USA) Inc., accounts receivable from Elpida USA in the amount of ¥5.8 billion as of the end of December, patents registered in the United States and license or sublicense agreements involving U.S. patents, patent applications or intellectual property rights.

The representative said Elpida also requires immediate relief from several lawsuits pending in the United States that pose a threat to the company's reorganization efforts in Japan.

Each of the pending U.S. lawsuits alleges that specified Elpida products infringe on patents held by the complaining parties, Elpida professional in charge of licensing Kota Takemura said in a statement filed with the court.

According to court documents, Elpida has more than $1 billion in both assets and debt.

As previously reported, Elpida filed its Japanese proceeding last month as a result of the historic appreciation of yen, the sharp decline in Dynamic Random Access Memory (DRAM) prices because of an intensification of competition in the industry and the sluggish demand for DRAM stemming from a severe flood in Thailand.

A hearing on the company's Chapter 15 petition, provisional relief and scheduling the recognition hearing is scheduled for March 20.

Elpida is a Tokyo-based manufacturer of DRAM integrated circuits. The Chapter 15 case number is 12-10947.

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