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Elpida foreign representatives seek to pledge 259 patents to Apple
By Jim Witters
Wilmington, Del., Sept. 27 - Elpida Memory, Inc.'s foreign representatives are seeking approval to pledge 259 U.S. patents as security for a payment obligation to Apple, Inc. of up to ¥40 billion, according to documents filed Sept. 27 with the U.S. Bankruptcy Court for the District of Delaware.
The 259 U.S. patents are among 523 the company is using as security in the Apple agreement.
The security agreement was approved April 13 by the Tokyo District Court, Eighth Civil Division, where Elpida filed for corporate reorganization under the Japan Corporate Reorganization Act.
The security obligation is intended to ensure Elpida continues to supply dynamic random access memory products to Apple under an August 2007 supply agreement.
"For the past few years, Apple has been one of Elpida's largest customers and provides Elpida with a reliable market for its DRAM products. Elpida and Apple have had a supply relationship for over five years, and Elpida's ongoing business relationship with Apple is integral to the success of Elpida's business and Elpida's ability to reorganize," the company said.
Elpida's entry into the security agreement was a condition for Elpida to maintain its long-term supply relationship with Apple, the company said.
The foreign representatives are seeking U.S. court approval to pledge the 259 U.S. patents as security under the Apple agreement.
Elpida also has pledged its Hiroshima factory as security for the payment of damages.
As of Sept. 25, ¥40 billion was equivalent to about $51 million, according to court documents.
A hearing on the request is scheduled for 2 p.m. ET on Oct. 24.
Elpida, a Tokyo-based manufacturer of DRAM integrated circuits, filed for bankruptcy on March 19, 2012 to gain recognition of its Japanese proceedings. Its Chapter 15 case number is 12-10947.
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