Toshiba files motion to have WDC memory sale injunction thrown out
This joint venture could be described as strained at best
Toshiba has filed a legal motion claiming a court has no right to judge Western Digital Corp's (WDC) attempt to halt its memory business sale, which, Toshiba says, would cause irreparable harm.
WDC through its SanDisk subsidiary had filed a motion for injunctive relief in the Superior Court of California for the County of San Francisco to prevent the transfer of its three flash foundry joint venture agreements with Toshiba until an existing arbitration request is decided by a tribunal.
Toshiba has carried out the obvious legal response by filing its own claim to have this injunctive relief filing dismissed.
Its description of WDC's actions is scathing:
... due to unanticipated financial pressures Toshiba has spun off its Japanese memory business ... and is attempting to sell that business. Originally a bidder, Western Digital is itself so highly leveraged that it cannot afford to pay fair value for the business.
Quickly outbid, it commenced an extensive effort to discourage bidders and force Toshiba to sell its entire memory business to Western Digital at a bargain price.
Western Digital has threatened buyers and bidders directly, it has threatened banks that may be interested in providing financing, it has filed a meritless arbitration hoping to delay the sale and increase Toshiba's financial distress, and now it has filed this litigation in the United States in a further attempt to block the planned sale.
Toshiba asserts that this San Francisco court has no jurisdiction over the case, that SanDisk's claims are groundless, and any intervention by the court will cause Toshiba irreversible injury.
In this respect it is brutally clear:
... issuing the injunction Western Digital seeks would severely and irreparably impair the bid or sale process, lead to Toshiba's delisting from the Tokyo and Nagoya stock exchanges, and cause it to cease operating as a going concern.
You can enjoy Toshiba's 22-page submission here (PDF) with its coldly clear description of WDC's actions during the bid process.
Separately Toshiba is suing WDC for $1bn. Their business relationship might well be described now as... strained.
The injunctive relief hearing is scheduled for July 14. We don't expect Toshiba and WDC lawyers in the USA will be enjoying their July 4 holiday. ®