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Toshiba Sues WD over Memory Business Sale Delay

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The sale of the Toshiba memory unit gains another wrinkle, as Toshiba declares it has had enough of Western Digital interference-- the former is suing the latter for $1 billion (or 120 billion yen).

Western DigitalThe litigation seeks to stop WD from claiming it has any ownership over the memory unit, which Toshiba is desperate to sell in order to gain some much needed cash. It comes a day after WD resubmitted a bid for the unit, just as Toshiba was set to finalise the sale to a consortium lead by the Japanese government, American private equity firm Bain Capital and S. Korean manufacturing giant SK Hynix.

In the meantime, WD continues to insist the sale represents a breach of the two companies' joint venture agreement, and as such it should be treated as a preferred bidder. However, sources tell the Financial Times that the resubmitted WD bid was "similar" to the one previously considered as "underpriced" by Toshiba.

In addition, Toshiba is also shutting out WD employees based in its Yokkaichi chip plant from accessing information related to the joint venture.

Toshiba is currently in crisis following huge writedowns on US nuclear subsidiary Westinghouse. It was hoping to present the sale to the Japan-US consortium at its AGM, but the WD offer lead to a delay on the shareholders' decision. Now Toshiba has until March 2018 to fill the gaping hole in its finances, at least if it wants to remain a listed company.

Go Toshiba Misses Self-Imposed Deadline for Chip Unit Sale, Sues Western Digital (Reuters)

Go Toshiba Says Agreement on Sale of Chp Unit Delayed (Financial Times)