Infineon and Qimonda bankruptcy administrator reach painful settlement

Infineon Technologies Infineon Technologies has reached an agreement with the insolvency administrators of former chipmaker Qimonda on a settlement that will end the legal dispute that has been pending at the Munich 1 Regional Court since the end of 2010, Infineon announced late Thursday.

The settlement agreement provides for a payment of €753.5 million, of which the nominal settlement amount is €800 million, minus the credit amount previously contracted with the insolvency administrator. This would have required approximately €3.4 billion plus interest. The settlement must now be decided by the court.

Settlement with Qimonda bankruptcy administrators will affect Infineon’s performance

The statement also said that under the agreement, all legal disputes and claims of the bankruptcy administrator against Infineon have been resolved. Infineon will use the terms established for legal disputes. The excess amount will have a negative impact on the earnings and cash flow of the discontinued business. The payment will be paid from existing cash resources.

Infineon spun off its memory business in 2006 and incorporated it into Qimonda through a contribution in kind. Qimonda filed for bankruptcy in early 2009. The legal dispute involved, among other things, allegations that Infineon’s memory business was worthless.