NEW YORK, Feb 20 (Reuters) - Two U.S. units of insolvent German memory chipmaker Qimonda AG filed for Chapter 11 bankruptcy protection in the United States on Friday, according to court documents.
Qimonda Richmond LLC and Qimonda North America filed their petitions for bankruptcy protection in U.S. bankruptcy court in Delaware, saying they intend to locate a buyer for their assets.
Qimonda North America listed assets in excess of $1 billion and liabilities in excess of $1 billion.
Qimonda AG filed for insolvency in January in Germany as a result of huge industry price drops and a global financing squeeze, but said it hoped to continue operations.
Based in Munich, Germany, the company is the world's fourth-biggest maker of DRAM memory chips, used mainly in PCs. It announced earlier this month that it would shut down its U.S. plant.
Qimonda AG, is a majority-owned subsidiary of Infineon Technologies AG, which owns 77.5 percent of the company. Qimonda's insolvency administrator in Europe has said it needs to find an investor by the end of March to continue operations and avoid liquidation.
Qimonda Richmond said in its bankruptcy filing that prices for DRAM products fell sharply in 2007 and steepened their fall again in 2008. The company had tried to diversify its products and, in October 2008, shut down part of its Richmond plant, laying off more than 1,000 workers.
Earlier this month, the Richmond facility was forced to shut down because Qimonda AG was no longer purchasing output from the plant and it had little access to cash and could no longer fund ongoing operations, it said in court papers.
About 500 employees were laid off this month and another 500 are expected to leave in the coming days. By the end of April 2009 the company said it intends to idle the plant and run it with a skeleton crew of 50 to 60 employees, while it searches for a buyer.
The company said it has about $10.3 million in cash and expects to generate more cash, which will be sufficient to fund its operations. It would consider bankruptcy financing if it could find terms that meet its needs.
Two former employees of the company also filed a lawsuit in the bankruptcy court on Friday, saying it may have failed to properly pay workers wages and benefits owed to them after a mass layoff on Feb. 4. The suit is seeking class action status.
The company's Virginia facility produces DRAM chips from 200 millimeter and 300 millimeter silicon wafers, the company said in court papers.
The case is In re: Qimonda Richmond LLC, U.S. Bankruptcy Court, District of Delaware, No.09-10589. The lawsuit is Jackson et al v. Qimonda Richmond LLC et al, in the same court, No. 09-50192
(Reporting by Emily Chasan; Editing by Richard Chang and Andre Grenon)
(emily.chasan@thomsonreuters.com; +1 646 223 6114; Reuters Messaging: emily.chasan.reuters.com@reuters.net) Keywords: QIMONDA/BANKRUPTCY
COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
© 2009 AFX News
