Summary
Western Digital Corporation (WDC) filed an 8-K on October 15, 2012, to report a significant development in its legal dispute with Seagate Technology, LLC. The District Court of Hennepin County, Minnesota, has vacated, in full, the $630.4 million final arbitration award previously issued against WDC. This ruling stems from an arbitration initiated by Seagate alleging trade secret misappropriation. While the court confirmed the arbitration award in favor of WDC on five trade secret claims, it vacated the award on three claims where WDC and a former employee had lost. The court has ordered a rehearing for these three disputed claims before a new arbitrator, to be agreed upon by both parties or appointed by the court if an agreement is not reached by November 2, 2012. This development is crucial for investors as it substantially alters the financial implications of the arbitration and removes the immediate $630.4 million liability from WDC's books, though the potential for future liability remains pending the rehearing.
Key Highlights
- 1The District Court of Hennepin County, Minnesota, vacated the $630.4 million arbitration award against Western Digital (WDC).
- 2The arbitration award was originally issued in favor of Seagate Technology, LLC, concerning trade secret misappropriation allegations.
- 3The court confirmed WDC's wins on five of the trade secret claims.
- 4The court vacated the arbitration award on three trade secret claims where WDC and a former employee had lost.
- 5A rehearing has been ordered for the three vacated trade secret claims before a new arbitrator.
- 6The parties have until November 2, 2012, to agree on a new arbitrator; otherwise, the court will appoint one.