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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE __________________________________________ ) In re ) Chapter 15 ) Elpida Memory, Inc., ) Case No. 12-10947 (CSS) ) Debtor in a Foreign Proceeding. ) Re: Docket No. 366 __________________________________________) FOREIGN REPRESENTATIVES OPPOSITION TO BONDHOLDERS MOTION FOR RECONSIDERATION OF COURTS ORDER GRANTING FOREIGN REPRESENTATIVES MOTION TO APPROVE SALE OF CERTAIN PATENTS TO RAMBUS AND FOREIGN REPRESENTATIVES MOTION TO APPROVE THE PATENT LICENSE AGREEMENT AND TECHNOLOGY TRANSFER LICENSE AGREEMENT Mr. Yukio Sakamoto and Mr. Nobuaki Kobayashi, as Court-approved foreign representatives (the Foreign Representatives) of Elpida Memory, Inc. (Elpida), an entity subject to insolvency proceedings in Japan (the Japan Proceeding) under the jurisdiction of the Tokyo District Court (the Tokyo Court), in its chapter 15 proceedings before this Court, submit this Opposition (the Opposition) to the Motion for Reconsideration (the Reconsideration Motion) of this Courts Order (the 363 Order) Granting the Foreign Representatives Motion to Approve the Sale of Certain Patents to Rambus and the Foreign Representatives Motion to Approve the Patent License Agreement and the Technology Transfer and License Agreement (the 363 Motions) filed by the purported Steering Committee of the Ad Hoc Group of Bondholders (the Bondholders) of Elpida [Docket No. 366], and respectfully state as follows: PRELIMINARY STATEMENT The Reconsideration Motion must be denied because the Bondholders have failed to meet the substantial burden placed upon them under Federal Rule of Civil Procedure 59(e) as incorporated through Rule 9023 of the Federal Rules of Bankruptcy Procedure. Specifically, the
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Bondholders have failed to demonstrate that (i) there has been an intervening change in controlling law, (ii) new evidence has become available, or (iii) there is a need to correct a clear error of law or to prevent manifest injustice. Rather, in the Reconsideration Motion, the Bondholders raise the specter of injustice while casting completely unfounded aspersions upon the motivations of the Foreign Representatives. Not only must the Reconsideration Motion be denied, but the Bondholders tactics here should not be accepted by the Court. In granting the 363 Motions, the Court found, inter alia, that the record demonstrated: that the agreements presented for approval (the Agreements) were negotiated at arms length; that Elpida had properly considered the risk that its sponsorship agreement with Micron Technology, Inc. (Micron) would not close and negotiated for provisions in the Agreements protecting Elpida in that event; that the terms of the Agreements themselves were fair and reasonable; that sound business reasons justified Elpidas entry into these Agreements; and that the Foreign Representatives had met their burden of proof by presenting extensive documentary evidence and by producing an appropriate witness with direct knowledge of the negotiations for examination.

In the face of these detailed findings, the Bondholders now assert that just two of the many findings this Court made in approving the 363 Motions should be vacated: (i) that there was no evidentiary support for the Bondholders argument that the Agreements were entered into with the purpose of entrenching Micron as Elpidas sponsor, and (ii) that nothing in the record reveals any collusion or improper motives in the negotiation of the Agreements. To advance this request, the Bondholders take issue with the Courts rulings limiting the scope of their discovery and argue that additional discovery into the Trustees motivations is necessary in light of two statements made by Mr. Sakamoto relating to the likelihood of the Micron sponsorship closing 2
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and the fact that, after such closing, there would likely be one contract with Rambus. See Reconsideration Motion 7, 13-14. The fact is, however, that the Bondholders have been allowed extensive document and deposition discovery, including the deposition of the head of Elpidas IP department, who was primarily responsible for the negotiations and Elpidas designated Rule 30(b)(6) witness. This discovery has not uncovered a single piece of evidence that calls into question the Trustees motivations or supports vacating this Courts Findings of Fact and Conclusions of Law issued in connection with the 363 Order on January 16, 2013 [Docket No. 359] (the Findings and Conclusions). The discovery provided was more than sufficient to allow the Bondholders to test their theories. Having come up empty, the Bondholders should not now be heard to claim that this Courts conclusions were erroneous or manifestly unjust. As further demonstrated below, the Reconsideration Motion must be denied. BACKGROUND 1. On September 28, 2012, the Foreign Representatives filed their 363 Motions

seeking this Courts authorization to enter into the three Agreements, which had been approved in the Japan Proceeding and involved assets based within the United States: the Technology Transfer and License Agreement (the TTLA) and Patent License Agreement (the PLA) with Micron, and the Patent Purchase Agreement (the PPA) with Rambus Inc. (Rambus).1 2. Shortly thereafter, on October 2, 2012, the Bondholders served the Foreign

Representatives with their requests for discovery concerning the Agreements: the First Requests and the Rule 30(b)(6) Requests (as defined in the Reconsideration Motion). In response to the
See Foreign Representatives Motion to Approve Patent License Agreement and Technology Transfer and License Agreement [Docket No. 165]; Foreign Representatives Motion to Approve Sale of Certain Patents to Rambus Inc. [Docket No. 163].
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First Requests, the Foreign Representatives produced responsive documents collected from the files of Seiji Nakashima and Shinya Yugi, the two Elpida employees who participated directly in negotiating the Agreements. As a Vice President at Elpida and the head of its Intellectual Property Group, Mr. Nakashima was the primary Elpida officer responsible for negotiating the Agreements and for representing the Trustees in these negotiations. The documents produced included emails collected from Mr. Nakashima and Mr. Yugi, including responsive communications between them and the Foreign Representatives. The Foreign Representatives also made Mr. Nakashima available as a Rule 30(b)(6) witness to testify about the Agreements on Elpidas behalf, and the Bondholders deposed Mr. Nakashima on their noticed topics for two days on October 22 and 23, 2012. 3. In light of the extensive discovery produced in response to the Bondholders

requests, this Court twice denied the Bondholders further requests to depose the Foreign Representatives personally: in a status conference on October 11, 2012, and again on November 26, 2012. See Transcript of Nov. 26, 2012 Hearing 21:5-18 (attached hereto as Exhibit A). 4. On December 5, 2012, the Court conducted a joint hearing (the Hearing) on

both 363 Motions. The parties entered into evidence several email communications and other documents exchanged during discovery, as well as the declarations of Mr. Nakashima filed in support of the 363 Motions. In addition, both the Foreign Representatives and the Bondholders had the opportunity to introduce Mr. Nakashimas testimony into the record through direct and cross examinations. 5. On January 16, 2013, after reviewing all the evidence in the record, the Court

issued its 363 Order granting both 363 Motions, thereby (a) authorizing Elpidas sale of certain patents to Rambus and (b) approving the TTLA and the PLA with respect to assets located in the 4
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United States. On that date the Court also issued its Findings and Conclusions containing its detailed factual and legal conclusions regarding the evidence presented at the Hearing and the arguments briefed by the parties. ARGUMENT 6. The Bondholders do not identify any clear error in the Courts findings at

paragraphs 93 and 96 of its Findings and Conclusions, nor do they explain how they would suffer manifest injustice without a reconsideration of the 363 Order. A motion to alter or amend a judgment [under Federal Rule of Civil Procedure 59(e) and Federal Rule of Bankruptcy Procedure 9023] must be grounded on (1) an intervening change in controlling law; (2) the availability of new evidence; or (3) the need to correct a clear error of law or prevent manifest injustice. In re Tribune Co., 476 B.R. 843, 852 n.15 (Bankr. D. Del. 2012) (citing Maxs Seafood Cafe v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999). When seeking reconsideration to correct an error of law or to prevent manifest injustice, a litigant should evaluate whether what may seem to be a clear error . . . is in fact simply a point of disagreement between the court and the litigant. Carr v. New Century TRS Holdings, Inc. (In re New Century TRS Holdings, Inc.), No. 07-10416 (KJC), 2012 Bankr. LEXIS 9, at *5 (Bankr. D. Del. Jan. 9, 2012) (quoting Dodge v. Susquehanna Univ., 796 F. Supp. 829, 830 (M.D. Pa. 1992)). 7. A motion for reconsideration, therefore, should not be used as a means to

reargue matters already argued and disposed of by prior rulings, or to put forward additional arguments which a party could have made, but neglected to make, before judgment. Id. (citing Dodge, 796 F. Supp. at 830); accord Smith v. City of Chester, 155 F.R.D. 95, 97 (E.D. Pa. 1994) (Parties are not free to relitigate issues that the Court has already decided . . . .); Brambles USA, Inc. v. Blocker, 735 F. Supp. 1239, 1240 (D. Del. 1990) (Reargument should not be 5
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granted where it would merely allow wasteful repetition of arguments already briefed, considered and decided. . . . [R]eargument and reconsideration requests are not a substitute for an appeal from a final judgment.) (quoting Weissman v. Fruchtman, 124 F.R.D. 559, 560 (S.D.N.Y. 1989)); cf. Quaker Alloy Casting v. Gulfco Indus., Inc., 123 F.R.D. 282, 288 (N.D. Ill. 1988) ([Courts] opinions are not intended as mere first drafts, subject to revision and reconsideration at a litigants pleasure.). Motions for reconsideration should be granted sparingly because of the interests in finality and conservation of scarce judicial resources. In re Tribune Co., 464 B.R. 208, 213 (Bankr. D. Del. 2011) (quoting Penn. Ins. Guar. Assn v. Trabosh, 812 F. Supp. 522, 524 (E.D. Pa. 1992)). 8. In the Reconsideration Motion, the Bondholders have given no new or even

plausible reasons to find error in this Courts conclusions that Elpida did not negotiate the Agreements with any improper or collusive purpose. On the contrary, the Bondholders already briefed and argued to this Court the very arguments made in their Reconsideration Motion, and they had ample opportunity to develop the factual record for their claims during discovery. Indeed, to the extent the Bondholders believed that they learned something in discovery that would have justified seeking additional discovery, those arguments should have been, and indeed were, raised prior to the Hearing. Further, the inferences the Bondholders seek to draw from the statements they cite are directly contrary to the findings the Court made after fully considering all the evidence in the record, especially the direct and cross examinations of Mr. Nakashima, Elpidas lead negotiator in the transactions. See Transcript of Dec. 5, 2012 Hearing (Hrg Tr.) 35:3-8, 54:8-12. As the Court found, Mr. Nakashima reported directly to the Trustees, kept them apprised of the progress of the negotiations and negotiated the Agreements at their direction and

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on their behalf. See, e.g., Findings and Conclusions 26, 33, 46, 48, 55, 68; see also Hrg Tr. 33:2234:1, 36:1137:2, 52:14-25, 61:12-20, 67:11-24, 75:1-22, 85:4-10, 86:4-16, 86:2387:8. 9. Both at the Hearing and in his Rule 30(b)(6) deposition, Mr. Nakashima testified

competently and comprehensively regarding Elpidas business reasons and purposes for entering into the Agreements. As recounted in his testimony and the Courts Findings and Conclusions, these purposes included obtaining valuable technology from Micron practically for free and offsetting the substantial royalty payments Elpida owed to Rambus. See Findings and Conclusions 30-31, 33, 37-38, 48-49, 54. The specific provisions attacked at the Hearing, including the TTLAs cross-licenses and the PPAs change of control clause, all served legitimate business purposes ancillary to the broader agreements. See, e.g., id. 28-30, 32, 5052, 54-55. The Court also found that the evidence demonstrated that Elpida exercised reasonable business judgment in negotiating the Agreements on the assumption that the sponsorship agreement with Micron was likely to close. See, e.g., id. 73-74. Further, Mr. Nakashimas testimony made clear that he negotiated the Agreements with specific provisions to protect Elpida in the event that Microns sponsorship did not close, such as the terms limiting the license granted to Micron under the TTLA to five years and requiring Micron to pay 800 million Japanese yen to continue the license should Elpida liquidate. See, e.g., id. 28-32, 51-54, 5659, 94-95; see also Hrg Tr. 44:17-19, 45:6-10, 45:16-20, 46:1-23, 47:23-25, 48:2-20, 49:3-7, 51:7-17, 51:20 52:2-4, 52:17-25, 78:17 79:21, 149:9-23. These findings directly contradict the Bondholders allegations that the Agreements may have been negotiated with the purpose of entrenching Micron as Elpidas sponsor. In all, nothing in Mr. Nakashimas extensive testimony or the documents produced suggested any collusive purpose or any intention to favor Micron

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impermissibly, and the Bondholders have not come forward with any new facts to contradict the wealth of evidence already considered.2 10. Given the ample evidence in the record, the Court committed no error in reaching

its conclusions without allowing the Bondholders to obtain additional discovery directly from the Foreign Representatives themselves. The Reconsideration Motion attempts to revive, yet again, the Bondholders previously rejected argument that the Court could not properly evaluate Elpidas reasons for entering into the Agreements without direct evidence of the Foreign Representatives motives. See Reconsideration Motion 13-14. But, as the Court ruled on November 26, 2012, deposing the Foreign Representatives was not necessary to resolve the 363 Motions and in fact would have been counterproductive, given the expense and delay that may [have been] caused. See Exhibit A. 11. Indeed, the Bondholders already had access to sufficient discovery to make their

arguments about Elpidas purposes for entering into the Agreements. The Bondholders collected extensive testimony during their deposition of Mr. Nakashima, who was authorized to testify on Elpidas behalf as its Rule 30(b)(6) representative and had the closest direct knowledge of its business reasons for negotiating these transactions. See, e.g., Nakashima Dep. 28:2129:3, 31:1432:20, 369:12371:21, 387:9390:24, 445:15447:23 (attached hereto as Exhibit B). The Bondholders also had the opportunity to cross-examine Mr. Nakashima thoroughly at the hearing regarding these same matters. All the documentary and testimonial evidence affirmed that Mr. Nakashima was the Elpida officer most knowledgeable about the negotiations and business
The email from Mr. Sakamoto cited in the Reconsideration Motion, which was entered into evidence at the Hearing, does not undermine or change this conclusion. See Reconsideration Motion 7. At most, this email indicates that Mr. Sakamoto assumed that the Micron sponsorship was likely to close for the purposes of Elpidas royalty negotiations with Rambus; it does not, however, suggest in any way that Mr. Sakamotos intention in these negotiations was somehow to ensure that the merger closed.
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reasons for the Agreements and most qualified to testify on these issues. See, e.g., Findings and Conclusions 19 n.4, 25-26, 30-31, 33-34, 40-49, 54-55, 58; see also Hrg Tr. 35:3-8, 39:10-23, 42:21-25, 47:3-10, 52:14-25, 54:6-12, 85:4-10, 86:4-16. As the Court concluded, [t]he testimony of Mr. Nakashima, who negotiated these agreements at the direction of Mr. Sakamoto, [was] sufficient to establish the Trustees reasonable business judgment, and the testimony of the Trustees themselves [was] not necessary in order for the Court to fully evaluate these agreements. Findings and Conclusions 68. 12. Having failed to make their case at the Hearing based on all the evidence

available, the Bondholders cannot now claim they have suffered injustice because they were unable to take further discovery from the Foreign Representatives themselves. Nothing in the case law suggests that discovery from the Foreign Representatives was necessary in order for the Court to decide whether the transactions were the result of the exercise of reasonable business judgment.3 In fact, bankruptcy courts applying section 363 have routinely relied on testimony from the debtors agents and advisors who had more direct, first-hand knowledge of the business purposes behind the transactions. See, e.g., Dai-Ichi Kangyo Bank, Ltd., Chicago Branch v. Montgomery Ward Holding Corp. (In re Montgomery Ward Holding Corp.), 242 B.R. 147 (D. Del. 1999) (finding a sound business purpose based on testimony from debtors executive vice president and compensation consultant); In re Blitz U.S.A. Inc., 475 B.R. 209 (Bankr. D. Del.
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The decision in In re Hayes Lemmerz International, Inc. does not contradict this proposition. In that case, the district court allowed reconsideration of the bankruptcy courts ruling in part because the court below had essentially deemed [certain material] factors irrelevant by denying Debtors discovery to such. No. 09-11655 (MFW), 2012 WL 1203731, at *3 (Bankr. D. Del. Apr. 9, 2012). Here, as discussed above, the Court allowed ample discovery into Elpidas purposes for entering the agreements, allowing the Bondholders both document discovery and a Rule 30(b)(6) deposition. The Court denied the Bondholders request to depose the Foreign Representatives not because it deemed these issues irrelevant but because, in light of the other discovery available to the Bondholders, the likely delay and expense of this particular deposition outweighed its marginal evidentiary value. See Exhibit A.

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2012) (finding a valid business purpose based on testimony from a director of the restructuring consulting firm hired by the debtor); In re Summit Global Logistics, Inc., No. 08-11566, 2008 Bankr. LEXIS 896 (Bankr. D.N.J. Mar. 26, 2008) (finding sound business judgment based on testimony of a member of the investment bank hired by the debtors). Accordingly, the Bondholders contention that the Court prevented the Bondholders from having a full and fair opportunity to obtain the necessary evidentiary support for their position, see Reconsideration Motion 13, has no support in either the facts or the law. See, e.g., Bayer AG v. Betachem, Inc., 173 F.3d 188, 191 (3d Cir. 1999) (Although the scope of discovery under the Federal Rules is unquestionably broad, this right is not unlimited and may be circumscribed.).

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CONCLUSION For the foregoing reasons, the Foreign Representatives respectfully submit that the Reconsideration Motion must be denied. Dated: February 8, 2013 Wilmington, Delaware RICHARDS, LAYTON & FINGER, P.A. By: /s/ Lee E. Kaufman Mark D. Collins (No. 2981) Paul N. Heath (No. 3704) Lee E. Kaufman (No. 4877) 920 North King Street Wilmington, Delaware 19801 Telephone: (302) 651-7700 Facsimile: (302) 651-7701 and DAVIS POLK & WARDWELL LLP Timothy Graulich (admitted pro hac vice) James I. McClammy (admitted pro hac vice) Giorgio Bovenzi (admitted pro hac vice) 450 Lexington Avenue New York, New York 10017 Telephone: (212) 450-4000 Facsimile: (212) 701-5800 Theodore A. Paradise (admitted pro hac vice) Izumi Garden Tower 33F 1-6-1 Roppongi Minato-ku Tokyo 106-6033, Japan Telephone: +81 3 5561 4421 Facsimile: +81 3 5561 4425 Attorneys for the Foreign Representatives

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