We have studied the microstructure of heavily Mg-doped Al 0.03Ga0.97N films grown by metal-organic vapor phase epitaxy in the lateral overgrowth mode (ELOG). A new type of defects with a platelet shape has been observed. According to TEM analysis, these defects are embedded in the overgrowth regions. The platelet is normal to the ELOG stripe direction [1100]AlGaN, forming trapezoidal trenches on the film surface. The thickness of the platelet is about 100nm. We have identified these defects as inversion domains using convergent beam electron diffraction and HR-TEM. Mg segregation at the coalescence boundaries between ELOG islands is believed to result in the formation of the defects.