DLA Piper served as lead counsel to Trident Microsystems, Inc., a publicly traded leader in the semiconductor sector in the digital television and set-top box industries, along with its 15 subsidiaries in the Cayman Islands, Asia and throughout Europe, as its Chapter 11 plan was confirmed by the US Bankruptcy Court for the District of Delaware. The plan will return a distribution of 90 percent to unsecured creditors of the Cayman Island company and 100 percent to unsecured creditors of the US parent company, and will provide a substantial return to equity holders of the US parent company.
Trident commenced Chapter 11 proceedings in the Delaware Bankruptcy Court and ancillary proceedings in the Cayman Islands in January 2012. Subsequent to the Chapter 11 filing, Trident was able to conduct a successful sale of its set-top box business, with sale consideration increasing 40 percent over the stalking horse bid.
Subsequently, DLA Piper assisted the debtors in completing four additional asset sales, which allowed for over 90 percent of the Trident workforce throughout the world to maintain their jobs with the asset purchasers. With the assets having been sold, DLA Piper then began assisting the debtors with the process of winding down the remaining entities and working to craft a Chapter 11 plan of liquidation to provide distributions to the company’s creditors and equity holders. In order to reach a consensual plan, the debtors had to overcome several significant impediments, including considerable litigation between the parent and subsidiary creditors relating to complex intercompany agreements, a dispute with the IRS regarding potential tax exposure, and a dispute between the parent company and its largest supplier and stockholders. After extensive multi-party negotiations throughout the world, agreements were reached on all of these issues and a consensual plan was filed.
The DLA Piper team representing Trident was led by Rick Chesley and included Kim Newmarch, Chun Jang, Aaron Paushter and Dan Simon in Chicago, Ann Lawrence and Bert Pan in Los Angeles, Ed Batts, Jeff Aronson and Howard Clowes in Palo Alto, and Stuart Brown and Cynthia Moh in Wilmington. In addition, the US team was assisted by restructuring, tax and employment counsel in the UK, Netherlands, Germany, France, China, Hong Kong, Singapore and Japan.
