Talks Collapse Between Toshiba and Western Digital

Toshiba is counting on the sale of the chip business to cover billions of dollars in cost overruns at its now bankrupt U.S. nuclear unit Westinghouse, while Western Digital says any deal would require its consent.

Toshiba allowed Western Digital partial access to shared data servers after the Superior Court of California granted a temporary restraining order earlier this month. But the Japanese company said it resumed blocking access after its petition for an appeal was accepted by the California Court of Appeal on Tuesday.

In response, Western Digital said that it will file a brief against the decision in the coming days.

The California Court of Appeal issued the temporary stay of the restraining order based only on a brief submitted by Toshiba, and without consideration of Western Digital’s opposition filing, the U.S. company said.

The next hearing on this case has been set for July 28 in the Superior Court of California.

Western Digital has also sought an injunction to block the planned chip-business transaction, arguing that any sale required its consent.

On July 14, the Superior Court of California postponed a decision on Western Digital’s injunction request and proposed requiring Toshiba to give the U.S. company two weeks notice before closing the sale.