FormFactor sues Spansion over unpaid $8.1 million order

formfactor-logoFormFactor has sued Spansion for $8.1 million it says the Sunnyvale flash memory maker owes it for product ordered and delivered but never paid for, according to information found in the Livermore company’s 10-K annual financial report filed with the SEC Friday.

The law suit was filed in Santa Clara County’s superior court a week ago, days before Spansion slashed its payroll by 3,000 employees, or more than a third of its work force.

The Livermore maker of wafer probe cards used in semiconductor manufacturing is seeking payment of the amount owed as well as an injunction stopping Spansion from “divesting itself of any monies” it recieved from a “certain third party entity, as well as costs and attorney’s fees.

Spansion has hired a new chief executive, John Kispert, paying him four months of his $900,000 salary up front, which is his to keep should he quit before four months are up. Spansion’s board also promised Kispert a $1.75 million bonus if he can arrange a merger of the company or sell off its assets.

Sounds like he’ll have to play beat the clock, though. To get the bonus he must make sure the procedes proceeds from any deal will cover all of its secured creditors claims and that he makes it happen before any trustee is appointed “in connection with any bankruptcy proceedings.”

Looks like FormFactor will have to stand at the back of the line if (er, when?) Spansion seeks protection in bankruptcy court.

Spansion seemed to add insult to injury to the workers it laid off earlier this week when its board reversed 10 percent pay cuts some of its executives took last year the very same day, characterizing the move as a an effort to keep the executives from quitting.

 

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  • Grammar and Spelling Police

    Try running spell check before you publish an article! Seriously!

  • Dear Officer —

    You know we actually do run the WordPress spell checker before I post these, and it didn’t mark “procedes” as a misspelling, if that is in fact the offending word to which you refer, and which I have now corrected!

    We’re always open to edits, but it would be helpful in the future if you could be specific about the error(s) you have spotted, since you take the time to give us directional feedback!

    Thanks for reading (and writing). Really!

  • Jack D., good come back on the Spelling B!

 
 
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