Mar. 1--Spansion, the Sunnyvale flash memory chip maker that outraged many of its workers when it laid off 3,000 of them last week while restoring the previously reduced pay of some executives, on Sunday sought bankruptcy protection from its creditors.

In its Chapter 11 petition, filed in U.S. Bankruptcy Court in Delaware, the company listed about $3.8 billion in assets and nearly $2.4 billion in debts.

"Chapter 11 is a difficult decision," said John Kispert, who was hired on Feb. 4 to replace retiring Chief Executive Bertrand Cambou. "It really provides this company the most effective means to preserve our market position and to maintain customer confidence."

Spansion has been consulting with its major creditors about the Chapter 11 filing and those talks have included discussions about arranging financing to help it keep operating while it is in bankruptcy court, according to a company news release.

"The company believes that its current and anticipated cash resources will be sufficient to pay its expenses and maintain its business operations while it explores and implements options to address its long-term cash needs," the release added.

In an interview Sunday, Kispert, 45, the former chief operating officer and president of KLA-Tencor, a Milpitas company whose products help make computer chips, said the company had $100 million in cash and operating expenses of $30 million a week. But he said that with ongoing revenue coming in the

company had enough cash to make it through the bankruptcy process without needing additional financing.

On Jan. 15, Spansion announced it had failed to pay the interest on some of its debt and that it was exploring merging with another company or selling itself. On Sunday, Kispert said "we're in very deep and active discussions" with other firms about such a deal. But he added that Spansion also was considering continuing on its own after it reorganizes its operations under bankruptcy protection.

"It has tremendous technology, tremendous people and a tremendous reputation in the markets," Kispert said.

If Spansion does forge ahead on its own, it probably would have to trim its costs much more, said Caris & Co. analyst Betsy Van Hees on Sunday. She noted that Spansion "didn't control expenses very wisely" in recent years, particularly in building a manufacturing plant in Japan.

Spansion was owned and formed by Sunnyvale computer-chip maker Advanced Micro Devices and Fujitsu, the Japanese technology company, in 1993 under the name Fujitsu AMD Semiconductor Limited.