SPANSION INC., Et Al. Debtors. Chapter 11 Cases
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THIS PROPOSED DISCLOSURE STATEMENT IS NOT A SOLICITATION OF ACCEPTANCES OR REJECTIONS OF THE PLAN. ACCEPTANCES AND REJECTIONS MAY NOT BE SOLICITED UNTIL A DISCLOSURE STATEMENT HAS BEEN APPROVED BY THE BANKRUPTCY COURT. THIS PROPOSED DISCLOSURE STATEMENT IS BEING SUBMITTED FOR APPROVAL BUT HAS NOT YET BEEN APPROVED BY THE BANKRUPTCY COURT. UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 Cases SPANSION INC., et al.1 Case No. 09-10690 (KJC) Debtors. (Jointly Administered) FIRST AMENDED DISCLOSURE STATEMENT FOR DEBTORS’ FIRST AMENDED JOINT PLAN OF REORGANIZATION DATED NOVEMBER 25, 2009 LATHAM & WATKINS LLP Michael S. Lurey Gregory O. Lunt Kimberly A. Posin 355 South Grand Avenue Los Angeles, CA 90071 Telephone: (213) 485-1234 Facsimile: (213) 891-8763 DUANE MORRIS, LLP Michael R. Lastowski Richard W. Riley Sommer L. Ross 1100 North Market Street, Suite 1200 Wilmington, DE 19801 Telephone: (302) 657-4900 Facsimile: (302) 657-4901 Counsel for the Debtors and Debtors in Possession 1 The Debtors in these cases, along with the last four digits of each Debtor’s federal tax identification number, are: Spansion Inc., a Delaware corporation (8239); Spansion Technology LLC, a Delaware limited liability company (3982); Spansion LLC, a Delaware limited liability company (0482); Cerium Laboratories LLC, a Delaware limited liability company (0482), and Spansion International, Inc., a Delaware corporation (7542). The mailing address for each Debtor is 915 DeGuigne Dr., Sunnyvale, California 94085. LA\2030380.6 TABLE OF CONTENTS Page ARTICLE I. INTRODUCTION ......................................................................................................3 A. Defined Terms .........................................................................................................3 B. Overview ..................................................................................................................4 C. Purpose of the Plan ..................................................................................................4 D. Summary of the Plan ................................................................................................4 E. Debtors’ Principal Assets and Indebtedness ............................................................5 F. Treatment of Claims and Interests ...........................................................................5 G. Voting and Confirmation Procedures ....................................................................10 1. Who May Vote ...........................................................................................10 2. Certain Risk Factors to Be Considered Prior to Voting .............................11 3. Voting Instructions and Voting Deadline ..................................................11 4. Voting Procedures ......................................................................................12 5. Who to Contact for More Information .......................................................13 6. Acceptance or Rejection of the Plan ..........................................................14 7. Time and Place of the Confirmation Hearing ............................................14 8. Objections to the Plan ................................................................................15 ARTICLE II. GENERAL INFORMATION REGARDING THE DEBTORS .............................15 A. Formation and History of the Debtors ...................................................................15 B. The Debtors’ Business Operations .........................................................................16 1. Products......................................................................................................16 2. Customers ..................................................................................................20 3. Manufacturing ............................................................................................20 4. Property Taxes and Assessed Valuations ..................................................21 5. Intellectual Property Portfolio ....................................................................21 6. Expressions of Interest in the Debtors’ Businesses ...................................22 C. Employees ..............................................................................................................22 D. Competitive Factors Affecting the Debtors’ Businesses .......................................22 E. Pre-Petition Capital Structure of the Debtors ........................................................24 1. Secured Credit Facility ..............................................................................24 2. The FRNs ...................................................................................................24 3. The Senior Notes........................................................................................25 4. The Exchangeable Debentures ...................................................................25 5. UBS Credit Facility....................................................................................26 F. Litigation ................................................................................................................27 ARTICLE III. THE CHAPTER 11 CASES ..................................................................................35 A. Events Leading to the Filing of the Chapter 11 Cases ...........................................35 B. Spansion Japan’s Corporate Reorganization Proceeding. .....................................38 C. Commencement of Chapter 11 Cases. ...................................................................38 D. Corporate Governance of the Debtors During the Chapter 11 Cases ....................39 1. Boards of Directors ....................................................................................39 2. Senior Management ...................................................................................39 E. Significant Developments in the Chapter 11 Cases ...............................................41 1. “First Day” Orders .....................................................................................41 i LA\2030380.6 2. Employment of Brincko Associates, Inc. and Retention of Professionals ..............................................................................................42 3. Appointment of the Official Committee of Unsecured Creditors .....................................................................................................43 4. Approval of Employment Agreements with Messrs. Kispert, Furr and Sarkisian. .....................................................................................44 5. Final Authorization to Use Cash Collateral ...............................................44 6. Samsung Settlement and Postpetition Samsung Actions ...........................45 7. Trading in Spansion Equity Securities and Claims ....................................46 8. Dissemination of Information About the Chapter 11 Cases ......................47 9. Rejection and Assumption of Executory Contracts and Unexpired Leases .......................................................................................47 10. Key Executive Retention and Incentive Plans ...........................................48 11. Claims Bar Date and Claims Summary .....................................................50 12. WARN Litigation.......................................................................................50 13. Motion for Appointment of Equity Committee. ........................................51 14. Suzhou Sale. ...............................................................................................51 15. Senior Note Indenture Trustee Complaint. ................................................51 F. Business Operations During the Chapter 11 Cases................................................52 1. Business Restructuring. ..............................................................................52 2. Business Relationship with Spansion Japan. .............................................52 3. Results of Operations. ................................................................................57 4. The Debtors’ Business Plan and Forecasts. ...............................................59 ARTICLE IV. SUMMARY OF THE PLAN ................................................................................62 A. Overview of Chapter 11 .........................................................................................62 B. Classification of Claims and Interests ....................................................................63 1. Introduction. ...............................................................................................63 2. Settlement of Intercompany Claims and Treatment of Claims Generally. ......................................................................................64 3. Treatment of Multiple Claims and Guaranty and Joint Liability Claims Against Multiple Debtors. ...............................................64 4. Impairment Controversies. .........................................................................64 C. Treatment of Claims and Interests .........................................................................64 1. Class 1 – Secured Credit Facility Claims. .................................................64 2. Class 2 – UBS Credit Facility Claims........................................................65 3. Class 3 – FRN Claims. ...............................................................................65