Spansion files for bankruptcy
SAN JOSE, Calif. -- Spansion Inc., the world's largest NOR flash supplier, has filed for bankruptcy amid growing anger among former employees at the company.
In a release issued on Sunday (March 1), Spansion said it will continue to pursue strategic alternatives, including the sale of the firm. But for now, and as expected, it has filed a voluntary petition for reorganization under chapter 11 of the U.S. Bankruptcy Code.
Each of Spansion's domestic subsidiaries also simultaneously filed chapter 11 petitions. Spansion, Spansion LLC, Spansion Technology LLC, Spansion International Inc. and Cerium Laboratories LLC filed their voluntary petitions for relief under chapter 11 in the U.S. Bankruptcy Court for the District of Delaware. The chapter 11 filings by Spansion and its domestic subsidiaries are events of default under Spansion's debt instruments.
As previously announced, on Feb. 9, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the ''Corporate Reorganization Law'' of Japan to obtain protection from its creditors as part of the company's restructuring efforts.
None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings.
The decision to seek chapter 11 protection was made in consultation with an ad hoc consortium of holders of Spansion's $625 million Senior Secured Floating Rate Notes due 2013.
Spansion (Sunnyvale, Calif.) continues to be engaged in discussions with this ad hoc consortium for the development of a plan of reorganization. It would permit Spansion to emerge from chapter 11 in a stronger financial and competitive position and for the continued exploration of multiple proposals from multiple parties seeking a strategic transaction.
The company believes that its current and anticipated cash resources will be sufficient to pay its expenses and maintain its business operations while it explores and implements options to address its long-term cash needs.
"Given our focus on Spansion's future, management and the board have concluded that chapter 11 provides the most effective means for Spansion to preserve its business, meet its post-petition obligations and maintain customer confidence and continuity while we complete this restructuring," said President and CEO John Kispert, in a statement. "At the same time we will continue to explore opportunities for a strategic transaction to ensure that we are doing all we can to maximize value for our stakeholders."