In Short:
German chipmaker Infineon Technologies has settled a long-running legal dispute by agreeing to pay 753.5 million euros ($837.21 million) to Qimonda AG’s insolvency administrator. This follows a lawsuit from 2010, where Qimonda, which Infineon spun off in 2006, claimed it owed them 3.35 billion euros. The settlement will impact Infineon’s earnings, but the insolvency process will conclude in 2025.
Infineon Settles Long-Standing Legal Dispute
Infineon Technologies AG, a leading German chipmaker, announced on Thursday that it has reached a settlement with the insolvency administrator of Qimonda AG, agreeing to pay 753.5 million euros (approximately $837.21 million). This payment effectively concludes a lengthy legal dispute that has persisted since Qimonda’s insolvency.
Background of the Dispute
This dispute dates back to 2010 when Qimonda’s administrator filed a lawsuit against Infineon, seeking 3.35 billion euros. The claim stemmed from allegations that Infineon had transferred operations to Qimonda at inflated prices. Qimonda, which was spun off from Infineon in 2006, faced a significant downturn and subsequently collapsed in 2009 following a decline in chip prices. The company entered insolvency after failing to establish a viable rescue package with Infineon.
Details of the Settlement
The settlement amount of 753.5 million euros is somewhat lower than the initially claimed 800 million euros. Infineon has indicated it will submit a declaration of subordination regarding already established claims totaling around 26.5 million euros, as referenced by the administrator in a statement.
Financial Implications for Infineon
In light of this settlement, Infineon will utilize provisions that had previously been set aside for this legal dispute. However, any payments exceeding these provisions are expected to negatively impact the company’s earnings and cash flow derived from discontinued operations.
Future Outlook
According to the administrator, the conclusion of the insolvency proceedings is anticipated by 2025, which may lead to substantial dividends for the creditors.
