Japan's Elpida Memory, the world's third-largest maker of DRAM, said Friday it will begin reorganization proceedings and submit a final plan by August.

Elpida filed for bankruptcy in February in a Tokyo District Court, saying it had accumulated debts of US$5.4 billion as of March of last year. The court made the order to commence corporate reorganization proceedings on Friday.

Yukio Sakamoto, President & CEO have been appointed by the court to serve as the Trustee with Nobuaki Kobayashi, attorney-at-law.

"We deeply regret and remain concerned about the hardship and inconvenience caused to you by recent events," wrote Trustees of Elpida Memory Yukio Sakamoto and Nobuaki Kobayashi in a letter to the company's stakeholders. "However, now that Elpida has permitted from the Court to move ahead corporate reorganization proceedings, we intend to fulfill our responsibilities as the Trustees by doing our best to administer Elpida for reorganizing its business. To maintain the degradation of the company's corporate value and maximize the value of its assets, we will reflect on and take advantage of Elpida?s many years of experience in the semiconductor industry."

The Japanese company is expected to search for outside investors and attempt to turn its business around. Earlier this week, the Nikkei business daily reported that Elpida was in discussions with Micron and possibly Intel.