Three Japanese law firms are among the lawyers advising on the bankruptcy of Elpida Memory, Inc., the world’s third-largest maker of computer memory chips.
Thirteen lawyers from Kobayashi & Associates Law Office, Oh-Ebashi LPC & Partners, and Ogawamachi Sogo Law Office are named as filing counsel in a statement released today by the company, announcing it has filed for corporate reorganization proceedings with the Tokyo District Court. The announcement also said the company has debts of around $5.6 billion.
Elpida has a global market share of around 12 percent in the production of dynamic random access memory (DRAM) chips, a component used in computers and smartphones. The Tokyo-based company was formed in 1999 through the merger of memory-making arms of two Japanese electronics companies, NEC Corp. and Hitachi Ltd. Its subsidiaries include branches in the U.S., Europe, Korea, Taiwan, China, and Hong Kong.
Elpida lost more than 75 percent of its share value between May and November last year amid poor sales of personal computers. While Korea’s Samsung Electronics Co. has weathered the storm, rivals including Elpida and Hynix Semiconductor, Inc. lost a combined $14 billion over three years, reports Bloomberg.
The company’s statement also cites the yen’s strength against the dollar and stagnation in demand for DRAM following last year’s flooding in Thailand as reasons for its poor financial performance.
“We sincerely regret any inconvenience caused by this petition for the creditors as well as the people who have been supporting us,” Elpida said in its statement.
Lawyer Atsushi Toki will act as supervisor and examiner–a role in which gives him control of Elpida’s transactions following the filing, as well as various investigatory powers. Toki was also a member of a three-member special committee that investigated the liability of non-executive directors in Olympus Corp. in respect to the company’s ongoing accounting scandal, according to a report filed by the committee last week.
Last June, Japanese law firm Nishimura & Asahi and Simpson Thacher & Bartlett both advised Elpida on a $1 billion debt-and-equity fundraising on the Tokyo Stock Exchange, having previously acted on the company’s 2005 initial public offering. Simpson Thacher, which has also represented Elpida in U.S. litigation, declined to comment on whether it is advising the company on its insolvency. Nishimura did not respond to a request for comment.