Crucial 2014 Annual Report Download - page 23

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ITEM 3. LEGAL PROCEEDINGS
Reorganization Proceedings of the MMJ Companies
On July 31, 2013, we completed the acquisition of Elpida, now known as MMJ, a Japanese corporation, pursuant to the
terms and conditions of an Agreement on Support for Reorganization Companies (as amended, the "Sponsor Agreement") that
we entered into on July 2, 2012 with the trustees of the MMJ Companies' pending corporate reorganization proceedings under
the Corporate Reorganization Act of Japan.
The MMJ Companies filed petitions for commencement of corporate reorganization proceedings with the Japan Court
under the Corporate Reorganization Act of Japan on February 27, 2012, and the Japan Court issued an order to commence the
reorganization proceedings (the "Japan Proceedings") on March 23, 2012. On July 2, 2012, we entered into the Sponsor
Agreement with the legal trustees of the MMJ Companies and the Japan Court approved the Sponsor Agreement. Under the
Sponsor Agreement, we agreed to provide certain support for the reorganization of the MMJ Companies and the trustees agreed
to prepare and seek approval from the Japan Court and the MMJ Companies' creditors of plans of reorganization consistent
with such support.
The trustees initially submitted the proposed plans of reorganization for the MMJ Companies to the Japan Court on August
21, 2012 and submitted final proposed plans on October 29, 2012. On October 31, 2012, the Japan Court approved submission
of the trustees' proposed plans of reorganization to creditors for approval. On February 26, 2013, the MMJ Companies'
creditors approved the reorganization plans and on February 28, 2013, the Japan Court issued an order approving the plans of
reorganization. Appeals filed by certain creditors of MMJ in Japan challenging the plan approval order issued by the Japan
Court were denied.
In a related action, MMJ filed a Verified Petition for Recognition and Chapter 15 Relief in the United States Bankruptcy
Court for the District of Delaware (the "U.S. Court") on March 19, 2012 and, on April 24, 2012, the U.S. Court entered an
order that, among other things, recognized MMJ's corporate reorganization proceeding as a foreign main proceeding pursuant
to 11 U.S.C. § 1517(b). On June 25, 2013, the U.S. Court issued a recognition order, which recognized the order of the Japan
Court approving MMJ's plan of reorganization. On November 19, 2013, the U.S. Court closed the U.S. Chapter 15 proceeding.
The plans of reorganization provide for payments by the MMJ Companies to their secured and unsecured creditors in an
aggregate amount of 200 billion yen, less certain expenses of the reorganization proceedings and certain other items. The plans
of reorganization also provided for the investment by us pursuant to the Sponsor Agreement of 60 billion yen ($615 million)
paid at closing in cash into MMJ in exchange for 100% ownership of MMJ's equity and the use of such investment to fund the
initial installment payment by the MMJ Companies to their creditors of 60 billion yen, subject to reduction for certain items
specified in the Sponsor Agreement and plans of reorganization.
Under MMJ's plan of reorganization, secured creditors will recover 100% of the amount of their fixed claims and
unsecured creditors will recover at least 17.4% of the amount of their fixed claims. The actual recovery of unsecured creditors
will be higher, however, based, in part, on events and circumstances occurring following the plan approval. The remaining
portion of the unsecured claims will be discharged, without payment, over the period that payments are made pursuant to the
plans of reorganization. The secured creditors will be paid in full on or before the sixth installment payment date, while the
unsecured creditors will be paid in seven installments. MAI's plan of reorganization provides that secured creditors will
recover 100% of the amount of their claims, whereas unsecured creditors will recover 19% of the amount of their claims. The
secured creditors of MAI were paid in full on the first installment payment date, while the unsecured creditors will be paid in
seven installments.