Trident Microsystems, Inc (fka TRIDQ)

[Wildbilly]

Trident Microsystems Seeks Court Approval to Retain CEO Bastani as Consultant

Posted: 27 Mar 2012 11:56 PM PDT
On March 27, 2012, Trident Microsystems filed papers [Dkt. No. 395] in its Bankruptcy cases seeking Court approval to retain the services of its CEO, Dr. Bami Bastani who was recently named President and CEO of Meru Networks. The agreement contemplates Dr. Bastani remaining with Trident, through approximately May 4, 2012, as CEO in a consulting capacity to oversee the sale of the TV Division. In addition, the consulting agreement also provides that Dr. Bastani would oversee the Company’s efforts to sell its remaining assets including the Audio Business Unit, Demod Business Unit and the remaining MEMC patent portfolio. In exchange, Dr. Bastani would be paid a fee of $25,000 plus the amounts owed to him under the KEIP with respect to the sale of the STB and TV Divisions (approximately $1 million). Under the terms of the agreement, Dr. Bastani would forego any payment under the KEIP with respect to the ‘Wind Down” bonus (as much as approximately $500,000) and would also forego any continuing health insurance coverage as well as any benefits that may have been due to him from any employment agreements prior to the institution of the KEIP.

Also on March 27, the Unsecured Creditors Committee of the TMFE Debtor responded to the Objection of the Equity Committee of the TMI Debtor with respect to the compensation arrangement between the TMFE UCC and Imperial Capital, its Investment Banker and Financial Advisor. Within that response the UCC made the following comment:


"...This objective is likely to run contrary to the goals of the statutory committee of equity security holders (the"Equity Committee") in the chapter 11 case of Trident Microsystems,Inc. ("TMI"), whose interests are structurally subordinated to the recoveries of the unsecured creditors of both TMI and TMFE as there is afinite amount of value to be distributed among the various beneficiaries in these cases."


This superfluous comment seems inapposite given that in the Schedules of Assets and Liabilities for the TMFE Debtor, TMI’s claims against TMFE comprised approximately $82 million of the $182 million in non-priority claims owed by TMFE. Thus ,TMI held approximately 45% of then on-priority claims against TMFE and that percentage may have increased since the filing of those schedules due to the amount of prepetition claims that NXP was purportedly successful in siphoning out of the Estates ahead of other similarly situated prepetition creditors via preferential transfers. Perhaps in a future filing the UCC can explain how one general unsecured creditor can be structurally subordinated to itself or to any other general unsecured creditor. If the schedules that have been filed are correct, TMI is an unsecured creditor of TMFE, listed alongside the other unsecured creditors of TMFE which would make them pari passu,not structurally subordinated. As such, the objective of the Equity Committee does not “run contrary” to the UCC’s representation of its constituents, because the constituents that the Equity Committee represents (TMI shareholders) are the owners of the entity that holds 45% of the claims that the TMFE UCC is representing.


The case is, In re Trident Microsystems,Inc., et al., Case No. 12-10069 (CSS)