Spansion Inc. (NYSE: CODE) announced today that the claims agent appointed to resolve certain pre-bankruptcy claims has entered into an agreement with Spansion Japan, a former subsidiary of Spansion Inc., to settle all claims asserted by and between Spansion Japan and the chapter 11 estates of Spansion Inc. and its related debtors.
Spansion Japan had asserted a claim for approximately $936 million related to damages allegedly incurred as a result of Spansion’s rejection of its foundry agreement with Spansion Japan. The claims agent has been engaged in litigation with Spansion Japan over the amount of damages sustained by Spansion Japan.
As part of the agreement, Citi, which is not a party to this litigation, will purchase the rejection damages claim from Spansion Japan for $100 million in cash. In separate transactions, the claims agent will agree to allow the rejection damages claim held by Citi in the amount of $200 million, and Spansion LLC, a subsidiary of Spansion Inc., will purchase 85 percent of the allowed claim from Citi for $85 million in cash. These transactions will become effective upon final approval of the settlement agreement by the U.S. bankruptcy court and the Tokyo District Court, which is handling Spansion Japan’s corporate reorganization proceeding in Japan. The benefit to Spansion will depend upon the total size of the claim pool ultimately determined in the company’s chapter 11 cases and the company’s stock price. However, the company believes the transaction will likely be accretive to its EPS.
“We believe this transaction will benefit all of Spansion’s stockholders,” said John Kispert, president and CEO of Spansion Inc. “The settlement provides an opportunity to retire some shares at an attractive price and eliminate a potentially large selling stockholder.”
Filed under: Business
Like this post? Subscribe to my RSS feed and get loads more!