Weichuan Subsidiary Liwei Loses Arbitration, Files for Bankruptcy

(Taipei, April 4, CNA reporter Tseng Jen-kai) Weichuan held a major information press conference today, announcing that its subsidiary Liwei has lost a commercial arbitration case and is required to pay USD 48.59 million (approximately NT$1.57 billion). Given that Liwei's assets are insufficient to settle all debts, the company has decided to file for bankruptcy with the court.

Weichuan holds over 70% of Liwei's shares. The company stated that it had already recognized a provision for estimated losses from the arbitration ruling in its previous year's financial report, resulting in losses of NT$490 million in the second quarter and NT$650 million in the fourth quarter of last year. It remains possible that some of these losses could be reversed in the future.

Weichuan's CEO, Li Chia-ching, explained today that Liwei had previously sold electric home beds to ASCION, but due to product defects and related issues, ASCION filed for arbitration with the International Centre for Dispute Resolution of the American Arbitration Association. The arbitral tribunal issued a partial award on July 30, 2025, Michigan time; a second award on October 30 of the same year; and the final award on February 17, 2026, ruling that Liwei must compensate ASCION for related losses.

Subsequently, Weichuan appointed a U.S. attorney as litigation representative and filed a petition to vacate the arbitral award in the U.S. District Court for the Eastern District of Michigan, Southern Division. ASCION also filed a petition to confirm the arbitral award. Both cases were heard by the same judge, with a hearing held on May 27, 2026, Michigan time. On July 23, the court ruled against Liwei's petition to vacate the award. Liwei received notice of the ruling from its attorneys on July 25.

According to the court's order, as of July 31, 2026, Liwei's total liability for arbitration-related payments amounts to approximately USD 48.59 million.

After evaluating Liwei's current financial condition and funding capacity, it was determined that its assets are insufficient to cover its liabilities, making continued operations impossible. As a result, Liwei's board of directors resolved to suspend operations from August 18, 2026, to August 17, 2027, and to file for bankruptcy with the court in accordance with corporate law. (Editor: Chang Liang-chih) 1150804