RCS - Sebastian Brunner - Settlement

Infineon Technologies AGAnnouncement

23/08/2024 08:15

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RNS Number : 5691B  Sebastian Brunner Communications  23 August 2024

Settlement between Dr Michael Jaffé as insolvency administrator for Qimonda
AG and Infineon provides for a settlement amount of 800 million euros

EQS-Media / 23.08.2024

Press Release

Lawyer Dr Michael Jaffé

Insolvency administrator for Qimonda AG, Munich

Settlement between Dr Michael Jaffé as insolvency administrator for Qimonda
AG and Infineon provides for a settlement amount of 800 million euros

Conclusion of insolvency proceedings possible in 2025 with substantial
dividend for the creditors

Munich, 22. August 2024.

Following lengthy and difficult negotiations, the insolvency administrator for
Qimonda, Dr Michael Jaffé, and Infineon Technologies AG have reached final
agreement in the action relating to undervalue and liability for impairment of
capital, which had been pending at the Munich Regional Court at first instance
since 2010.

Qimonda AG emerged from Infineon Technologies AG in 2006 after Infineon
Technologies had transferred its memory chip division to Qimonda at the time.
At its height, it employed 13,500 people globally and had some of the highest
sales among global chip manufacturers. It was listed on the New York Stock
Exchange in August 2006. In January 2009, Qimonda AG was obliged to file for
insolvency after it was unable to continue to run its business profitably in
the previous years and was also unable to obtain state funding.

Action relating to undervalue and liability for impairment of capital pending
since 2010

The carve-out of the memory chip division took place in 2006 by way of two
contributions in kind made to Qimonda AG. In the action brought by the
insolvency administrator Dr Michael Jaffé in 2010 before the Munich Regional
Court, the insolvency administrator asserted that the memory chip business
carved off and contributed to by Infineon Technologies AG was not recoverable.
The insolvency administrator brought an action for reimbursement of the
impairment of capital from the issue amounts of the shares issued to Infineon
as part of the process of carving out Qimonda (referred to as the "action
relating to undervalue and liability for impairment of capital").

In January 2024, the expert appointed by the court submitted an opinion that
showed a negative value for the contributed domestic and foreign business
units. Both parties raised objections to the expert opinion. Infineon had also
cited other aspects, such as the fact that the liquidation value of the assets
contributed would reach the values required for the contributions in kind.
This was not the subject of the expert opinion.

Settlement agreement for 800 million euros

Following the submission of the expert opinion, the parties held in-depth
settlement talks. The negotiated settlement now provides for a settlement
amount of 800 million euros. The actual payment amount is slightly lower, as
Infineon is submitting a declaration of subordination for already established
schedule claims, among other things, which corresponds to a value of around
26.5 million euros and at the same time increases the insolvency dividend for
the creditors. In addition, the partial settlement concluded in 2014 provided
for a credit amount of 15 million euros already paid, which must now be taken
into account. After deduction of all items, Infineon will therefore pay 753.5
million euros to the insolvency estate of Qimonda AG.

In total, Infineon will then have paid an amount of around 1 billion euros to
the insolvency estate of Qimonda AG. In 2014, the remaining disputes between
Infineon Technologies AG and the insolvency administrator had already been
resolved in a partial settlement and all patents of Qimonda AG were sold to
Infineon Technologies AG. Infineon had already paid a total of 260 million
euros at the time.

The creditors' committee of Qimonda AG and the Management Board and
Supervisory Board of Infineon Technologies AG have already approved the
settlement. It will be implemented without delay, which will then also enable
the insolvency proceedings to be concluded and a substantial insolvency
dividend to be paid to the creditors.

"This settlement means that the final matter in dispute in the insolvency
proceedings over the assets of Qimonda AG has been resolved. Consequently,
preparations can now begin to bring the proceedings to a conclusion and allow
the creditors to also benefit from this significant success," said insolvency
administrator Dr Michael Jaffé.

Proceeds of over 1.2 billion euros realised from disputed transactions

The insolvency administrator Dr Michael Jaffé has thus realised proceeds of
over 1.2 billion euros for the creditors in consistently contentious disputes
with various parties. For the creditors, this represents a significant success
which could not have been expected at the start of the proceedings. As purely
a holding company, Qimonda AG had neither substantial liquid funds nor assets
that could have been easily realised when the application was filed. Almost
all subsidiaries were themselves involved in insolvency proceedings. The
success of the insolvency proceedings therefore depended to a large extent on
the ability to enforce claims against third parties and also to realise the
intangible assets embodied in the patent portfolio to the best possible
extent.

At the time, Qimonda AG's patent portfolio comprised thousands of patents and
patent applications worldwide. The property rights related to inventions with
relevance to the semiconductor, computer and telecommunications industries,
most of which had been licensed to major market players prior to the
insolvency. Numerous legal disputes were then conducted in Germany and abroad
regarding the holding of the licences during the insolvency. In particular,
there was a dispute about the effects the German insolvency proceedings had on
the licence rights to the US patents of Qimonda AG. The former licence
holders, including Samsung, Infineon, IBM, Hynix, Intel, Nanya and Micron,
took the position that their licence rights continued to exist despite the
insolvency. After the US Bankruptcy Court in Alexandria initially ruled in
favour of the insolvency administrator in November 2009, the dispute had to be
taken all the way to the US Supreme Court. In the landmark case Jaffé v.
Samsung Electronics Co. (135 S.Ct. 66) in October 2014, the US Supreme Court
ruled in favour of the licence holders with regard to the US patents.

At the same time, the patent portfolio was marketed via a licensing campaign,
which also involved patent litigation. This resulted in the realisation of
total licence revenues of around 100 million euros. The patent portfolio was
finally offered on the market in an international sales process and sold to
Infineon Technologies AG as the highest bidder.

Further proceeds were generated from legal challenges: In particular,
transactions that had taken place shortly before the insolvency application
was filed were contested and litigation was also conducted in this regard
across several instances, which have since been settled to the benefit of the
insolvency estate. Proceeds totalling around 200 million euros were realised
from these legal challenges.

Positive effects also for creditors of subsidiaries

The conclusion and implementation of the settlement with Infineon Technologies
AG will also have a positive impact on the creditors of the insolvent
subsidiaries, in particular Qimonda Dresden GmbH & Co. oHG and Qimonda
Holding BV. Those creditors will benefit as the companies specified are
entitled to substantial claims against Qimonda AG and will receive
corresponding insolvency dividend payments, which they will pass on to their
creditors. In addition to the employees, this also affects public authorities
in Germany and Portugal which had granted subsidies prior to the insolvency.
Their claims will probably be satisfied (almost) in full.

 

Additional information:

For over two decades Dr jur. Michael Jaffé has regularly been appointed by
the courts in complex, large-scale insolvency cases where the objective is to
secure the assets for the creditors and to realise the best possible value. He
has specialist expertise in group insolvency proceedings in multiple stages,
and proceedings with cross-border circumstances. Dr jur. Michael Jaffé's
best-known national and international insolvency cases include the media group
KirchMedia of the late Dr Leo Kirch, the former global memory chip
manufacturer Qimonda, and the German subsidiaries of the Petroplus group. As
insolvency administrator for three of the German P&R container management
companies, he sold the global fleet of containers. In addition, since 25
August 2020, he has acted as the insolvency administrator of Wirecard AG and
further Wirecard companies.

The law firm JAFFÉ Rechtsanwälte Insolvenzverwalter has been one of the
leading law firms in the fields of insolvency administration, insolvency law
and restructuring (in compliance with the ESUG law on further facilitation of
company restructuring) for more than two decades, in particular for complex
and cross-border proceedings. Its many years of experience, expertise and
independence provide a crucial foundation for this, and they are frequently in
demand, especially in complex proceedings. This is one of the reasons the firm
has enjoyed the trust of courts and creditors for decades, particularly in
complex proceedings where the interests of the parties involved are in
conflict. With its own highly-effective structure, which has grown over the
years, the firm can conduct proceedings of any size in the interests of
creditors.

Please do not hesitate to contact us for further information:

 Insolvency administrator       Media relations
 Dr jur. Michael Jaffé          Sebastian Brunner
 Lawyer                         Corporate Communication
 Specialist lawyer for tax law  Telephone: 0175/5604673
 Specialist for Insolvency      Email: sebastian.brunner@brunner-communications.de
 and restructuring law

Franz-Joseph- Str. 8
 Franz-Joseph- Str. 8
 80801 Munich

 

End of Media Release

Issuer: Sebastian Brunner Communications

Key word(s): Finance

22.08.2024 CET/CEST Dissemination of a Press Release, transmitted by EQS News
- a service of EQS Group AG.

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