Li Wei, Subsidiary of Wei Hsun, Ceases Operations and Files for Bankruptcy Due to Inability to Pay Arbitration Damages

Wei Hsun (3032-TW) held a material information press conference today (4th), announcing that its subsidiary Li Wei is unable to meet its arbitration-related payment obligations. After evaluating the company's current financial condition and funding capacity, it was determined that assets are insufficient to cover liabilities, rendering continued operations impossible. As a result, the company has resolved to cease operations and file for bankruptcy with the court in accordance with the law.

Li Wei previously sold electric home bed products to Ascion. Following issues such as product defects, Ascion filed for arbitration with the International Centre for Dispute Resolution of the American Arbitration Association. A final arbitral award was issued on February 17 this year, ruling that Li Wei must compensate Ascion for related losses. A corrected award was subsequently issued on April 10.

To seek legal relief, Li Wei appointed counsel and filed a petition to vacate the arbitral award in the U.S. District Court for the Eastern District of Michigan, Southern Division. Meanwhile, Ascion filed a petition to confirm the arbitral award. Both cases were consolidated and heard by the same judge, with a ruling issued on July 23 (U.S. time), rejecting Li Wei’s petition to vacate the award and confirming the arbitral award.

Under the U.S. court order, the total amount Li Wei is required to pay Ascion under the final arbitral award, recalculated as of July 31, 2026, amounts to USD 48.59 million. Since Li Wei is unable to repay its full debt, the board of directors resolved on August 4 to cease operations and apply to the court for bankruptcy declaration.

Wei Hsun recently disclosed that Li Wei had accrued compensation expenses of USD 46.5735 million in 2025, along with USD 25,400 in compensation and estimated interest of USD 1.4631 million in 2026. However, since Wei Hsun is not a party to the arbitral award, the incident has no impact on Wei Hsun’s financial condition or business operations.