Spansion unsecured, damages claims to be sold under ChipMOS agreement

By Caroline Salls

Pittsburgh, Jan. 14 - ChipMOS Technologies (Bermuda) Ltd. subsidiary ChipMOS Technologies, Inc. has entered into a revised term sheet that it expects will lead to a definitive agreement to sell a claim against Spansion Inc. filed by ChipMOS Taiwan to Citigroup Financial Products Inc., according to a ChipMOS news release.

The claim includes $66 million to $70 million of accounts receivable for testing and assembly services provided to Spansion.

The purchase price is expected to be roughly $33 million to $35 million, payable upon ChipMOS Taiwan's and Citigroup's execution and delivery of a definitive agreement containing the claim sale terms and conditions.

In addition, the revised term sheet also calls for the sale of $234 million in breach of contract and liquidated damages rights against Spansion.

ChipMOS said the purchase price for the damages is expected to be about $117 million, contingent on allowance of this claim by the U.S. Bankruptcy Court for the District of Delaware.

Also, ChipMOS said Fulcrum Credit Partners LLC has filed a complaint with the District Court of Travis County, Texas, naming ChipMOS Taiwan, ChipMOS USA and Citigroup as defendants.

According to the release, the complaint alleges that ChipMOS Taiwan and Fulcrum reached an agreement for the sale of ChipMOS Taiwan's general unsecured claim against Spansion.

Fulcrum's complaint seeks a declaratory judgment that ChipMOS Taiwan and Fulcrum have a binding agreement for the sale of the claim, an unspecified amount of actual, consequential and exemplary damages and other relief.

ChipMOS said it denies these allegations and intends to vigorously contest the complaint.

ChipMOS is an independent provider of semiconductor testing and assembly services to customers in Taiwan, Japan, and the United States.

Spansion, a Sunnyvale, Calif.-based maker of flash memory products, filed for bankruptcy on March 1, 2009 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 09-10690.

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