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U.S. judge postpones decision in bid to block Toshiba memory unit sale

Reuters 

By Stephen Nellis

(Reuters) - A U.S. judge did not reach a decision Friday in Corp's bid to temporarily block Corp <6502.T> from selling its flash memory business in an $18 billion deal but proposed requiring to give two weeks' notice before closing.

is scrambling to sell its flash memory unit to cover losses from its nuclear reactor business.

In late June, announced its preferred bidder was a group made up of Bain Capital, South Korean chip maker SK Hynix <000660.KS> and Japanese-government backed banks that offered $18 billion.

Digital, which is also bidding, sued in San Francisco County Superior Court in mid-June, saying it believed a joint venture with means needs its consent to sell the flash business.

Digital's joint venture with helps finance equipment at Toshiba's plants in exchange for some of their output.

Separately from the California lawsuit, is also contesting its consent rights in an international arbitration tribunal. filed its lawsuit in San Francisco to prevent from closing the sale of its memory unit before arbitration has a chance to play out.

At the hearing, Judge Kahn proposed requiring to give two weeks notice if it believed it would close the sale before the arbitration finished.

Toshiba's attorney said they were concerned about agreeing to be bound by the San Francisco court's jurisdiction. has argued that because it is a Japanese company and the deal is taking place mostly in Japan, the court should not have jurisdiction.

Attorneys for subsidiary SanDisk, which is formally party to the case, expressed concern that any order in which did not agree to the court's jurisdiction would not be enforceable.

The two sides could not agree, so Judge Kahn instructed them to come up with final language for his proposed order and set a new hearing for July 28, when a related dispute between the two will be heard.

In a statement, CEO Steve Milligan called the proposed order and postponement a "victory."

"Our entire goal was to preserve and protect our rights through the binding arbitration process, and that's precisely what the court has done today," Milligan said.

called Judge Kahn's proposed order "a 'finessed' alternative to issuing a preliminary injunction" and confirmed it agreed not to close a sale before July 28.

(Reporting by Stephen Nellis; Editing by Leslie Adler and Cynthia Osterman)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Sat, July 15 2017. 05:31 IST
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