$630 Million Award Vacated in Seagate/Western Digital Arbitration
Oct 15th 2012 7:23AM
It was just on Friday that Citigroup downgraded disk-drive makers Western Digital Corp. (NASDAQ: WDC) and Seagate Technology Ltd. (NASDAQ: STX) to Sell based on the current technology climate. Now we have a development on an ongoing arbitration between the two companies, according to an SEC filing this morning. At issue is a $630 million award being vacated where Seagate had alleged misappropriation of eight alleged trade secrets by Western Digital and a former employee.
The SEC filing said:
On October 12, 2012, the District Court of Hennepin County, Minnesota (the "Court") vacated, in full, the $630.4 million final arbitration award previously issued against Western Digital Corporation (the "Company") in the arbitration between the Company and Seagate Technology, LLC ("Seagate") that concluded on January 23, 2012. In the arbitration, Seagate alleged, among other things, misappropriation of eight alleged trade secrets by the Company and a now former employee. The Court confirmed the arbitration award with respect to each of the five trade secret claims that Western Digital and the former employee had won at the arbitration, and vacated the arbitration award with respect to the three trade secret claims that Western Digital and the former employee had lost. The Court ordered that a rehearing be held concerning those three alleged trade secrets before a new arbitrator agreed upon by the parties and that if by November 2, 2012 the parties are unable to reach agreement, then the Court will appoint a new arbitrator.
Western Digital shares closed at $36.02 on Friday, against a 52-week range of $22.64 to $45.94. Seagate shares closed at $28.07 on Friday, against a 52-week range of $11.21 to $35.71.
JON C. OGG