It is probably a good week to settle legal disputes that have been simmering for years. First, Deutsche Bank reached an agreement with many plaintiffs over the Postbank takeover, a dispute that goes back to 2010. Now the Munich-based chip company Infineon has also settled a legal dispute over its former subsidiary Qimonda – after 14 years.
This will be quite expensive for Infineon – just like for Deutsche Bank – more expensive than expected. The semiconductor manufacturer will have to pay a further 750 million euros to Qimonda insolvency administrator Michael Jaffé. Infineon had only set aside around 220 million euros for the dispute so far. The profit statement for the current fiscal year, which ends in September, will now be burdened with a further 660 million euros, as there are also interest effects.
“A more expensive end, but at least an end.”
There are enough liquid assets to pay out the sum, a spokesman said. “Painful, but manageable,” one analyst told Reuters. Another said the sum was surprisingly high: “The bottom line is a more expensive end for Infineon, but at least it’s an end.”
The case is certainly complicated. 18 years ago, in 2006, Infineon spun off its entire memory chip business. At the time, it was very volatile, made high losses and threatened to push the company into insolvency. So it had to be done away with quickly. The new subsidiary was called Qimonda, had 13,500 employees and was one of the largest memory chip manufacturers in the world at the time. The company eventually went public on the New York Stock Exchange and Infineon sold its shares. But it never made a profit, the desired state aid did not come, and in January 2009 Qimonda went bankrupt. At least Infineon was not affected, has since specialized in intelligent semiconductors and is now one of the ten largest chip companies in the world, the only one based in Europe.
But the Qimonda bankruptcy had a sequel. The Munich-based insolvency administrator Jaffé, who had also already wound up the Kirch Group and is currently the insolvency administrator of Wirecard, has been taking action against Infineon since 2010. The accusation: At that time, a business that was not valuable was actually spun off. Infineon was supposed to pay for this. Infineon had estimated the value of the memory chip division at 600 million euros when it was spun off, but an expert appointed by the Munich I Regional Court recently came up with a negative value in the billions. Jaffé’s first claim was 3.4 billion euros plus interest.
Now both sides have reached an agreement. Infineon announced that all legal disputes and claims by the insolvency administrator against Infineon are off the table. In total, Jaffé has now won 1.2 billion euros, and Qimonda’s creditors will receive the money. Jaffé has now promised them a “substantial” insolvency quota that can be paid out relatively soon. State subsidies to Qimonda can now also be repaid.