Trident Microsystems, Inc. and Cayman Subsidiary File for Chapter 11 Protection
January 04 2012 - 7:40AM
Trident Microsystems, Inc. ("Trident" or "the Company") today
announced that the Company and its Cayman subsidiary, Trident
Microsystems (Far East) Ltd. have filed voluntary petitions under
Chapter 11 of the United States Bankruptcy Code in the United
States Bankruptcy Court for the District of Delaware. Trident
will shortly file for protection in the Cayman Islands as well.
As part of the filing, Trident has filed a motion to approve the
bid procedures for the sale of its Set-Top-Box business operations
to Entropic Communications, Inc. ("Entropic") pursuant to the asset
purchase agreement included with the motion. Trident intends
to continue to operate all of its business lines in the ordinary
course and has ample liquidity to do so, while it completes the
Bankruptcy approval process regarding the sale of its Set-Top-Box
business to Entropic and explores strategic alternatives for its
remaining business units.
"Trident, like many of its competitors, has been undergoing
rapid changes which have hindered its ability to operate
profitably," stated Dr. Bami Bastani, chief executive officer of
Trident. "A combination of increased pricing pressures
in our industry, lower demand in consumer electronics, and slower
than anticipated new product adoption has contributed to increased
operating losses, a deterioration in liquidity and an erosion in
equity values for Trident." Trident recently announced that it
was exploring a number of strategic alternatives, and this process
led to the contemplated sale of the Set-Top-Box business to
Entropic (Nasdaq:ENTR), a leading provider of silicon and software
solutions for the home entertainment market. Bastani added
that "we are extremely pleased with the opportunity that Entropic
provides for not only our Set-Top-Box business, but also our key
suppliers and vendors, customers and our dedicated employees
throughout the world." This transaction has been approved by
the Boards of Directors of Trident and Entropic. The sale of
the Set-Top-Box business to Entropic will be subject to a bidding
process and approval by the Bankruptcy Court and the Cayman court,
and it is expected that the sale will close in late February,
2012.
Trident also announced that it has entered into a license
agreement with RDA Technologies, Ltd., pursuant to which it granted
a non exclusive license to its SX-5 SOC product for the television
market. Under the license agreement, Trident has received an
upfront fee of $7.5 million and expects to receive an additional
$8.5 million in the near term. As a result of cost cutting
efforts, the RDA license agreement, and the receipt of funds from
the sale of its facility in China, the Company believes its cash
balance as of December 31, 2011 provides adequate liquidity to
continue to meet customer and vendor requirements while the
marketing efforts for its key assets continues.
During the interim, Trident expects that Chapter 11 protection
will enable the Company to conduct its business operations in the
ordinary course. To that end, the Company is seeking approval from
the court for a variety of First Day and other initial motions,
including requests to make wage and benefit payments to employees
and continuation of the Company's global cash management
system.
None of Trident's other operating subsidiaries are subject to
the Chapter 11 proceedings, and they will continue to operate in
the ordinary course of their businesses.
Additional information on the filing can be found at the Claims
Agent's website at www.kccllc.net/trident.
Forward-Looking Information
This press release contains forward-looking statements,
including statements regarding liquidity expectations and timing
expectations as well as the Company's ability to continue to
conduct business in the ordinary course. The forward-looking
statements made above are subject to certain risks and
uncertainties, and actual results could vary materially depending
on a number of factors. These risks include, in particular, the
ability to conclude the transaction with Entropic or alternative
transactions in a timely manner and on satisfactory
terms. Additional factors that may affect Trident's business
are described in detail in Trident's filings with the Securities
and Exchange Commission available at http://www.sec.gov.
CONTACT: Trident Microsystems, Inc.
www.kccllc.net/trident