8-KRegulation FD

WESTERN DIGITAL CORP 8-K Report, Regulation FD Disclosure (Oct 8, 2014)

Filed October 8, 2014For Securities:WDC

Summary

This Form 8-K filing by Western Digital Corporation (WDC) on October 8, 2014, discloses a significant legal development. The Minnesota Supreme Court affirmed a prior decision, reinstating a $630.4 million arbitration award against WDC in favor of Seagate Technology, LLC. This award stems from a 2011 arbitration concerning alleged misappropriation of trade secrets. While the company had accrued $758 million as of June 27, 2014, for this matter, the final payout will include the $525 million award, $105.4 million in pre-award interest, and ongoing interest. Importantly, WDC stated that the payment will be made by a foreign subsidiary using offshore cash and will not impact its operational activities. The decision is final and not subject to further appeal.

Key Highlights

  • 1Minnesota Supreme Court upholds $630.4 million arbitration award against WDC in favor of Seagate.
  • 2The award relates to trade secret misappropriation allegations from a 2011 arbitration.
  • 3Total payout includes $525 million award + $105.4 million pre-award interest + accrued interest.
  • 4WDC had already accrued $758 million as of June 27, 2014, for this legal matter.
  • 5Payment will be funded by a foreign subsidiary using cash held outside the U.S.
  • 6The company asserts the payment will not impact WDC's operations.
  • 7The Minnesota Supreme Court's decision is final and not appealable.

Frequently Asked Questions

This filing reports that the Minnesota Supreme Court affirmed a final arbitration award of $630.4 million against Western Digital Corporation (WDC) in favor of Seagate Technology, LLC. This legal decision is not subject to further appeal.

The arbitration award originates from a 2011 arbitration where Seagate alleged misappropriation of eight trade secrets by WDC and a former employee. The final award is for three of those trade secret claims.

Western Digital will pay the award using cash and cash equivalents held by one of its foreign subsidiaries outside the United States. The company stated that this payment will not have any impact on its operations.

Yes, as of June 27, 2014, Western Digital had already recorded an accrual of $758 million for this specific matter, which covers the expected total payout, including accrued interest.