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Associated Press BOISE - A U.S. Bankruptcy Court judge in Reno, Nev., is allowing Washington Group International Inc. to pay bills that were due before its bankruptcy filing and to continue paying employees during reorganization.

As part of the ruling, the judge also approved $150 million of the approximately $200 million in loans that were offered to Washington Group by the 97 banks that will take possession of the company should its reorganization plan be approved.

The court order issued Thursday means Washington Group's 600 employees in Boise will be able to keep their jobs while the bankruptcy plays out.

Washington Group officials announced on Monday they had filed for Chapter 11 bankruptcy, a move to protect the construction and engineering company from creditors while it reorganizes.

The bankruptcy filing - rendering the company's common stock and the warrants held by stockholders in the previous bankruptcy in 1996 worthless - has angered shareholders, who are contemplating lawsuits.

"As a person involved in construction, I was betting on Dennis Washington and Washington Group International because of Washington's reputation in Montana" as being an upstanding businessman, said Ron Brown of Boise, who owns 15,000 shares. Washington lives in Missoula.

Brown acknowledged on Thursday that he had been contacted by a lawyer seeking to file a lawsuit against the company.

"I don't understand why they didn't come to shareholders first and ask for money before jumping to file bankruptcy," he said. "I would have gladly given them more money on top of my shares."

The company said it was unable to pay off loans because of cash-flow problems stemming from its acquisition of Raytheon Engineers & Constructors in July.

Washington Group has filed a fraud lawsuit against Raytheon alleging the company covered up liabilities and overstated assets before the sale. Washington Group contends Raytheon owes it about $700 million. Raytheon officials have denied the allegations.

"The decisive actions by the court, together with the substantial financing facility that has been arranged, have moved Washington Group further down the path towards a successful reorganization," Washington Group President Steve Hanks said.

As part of the reorganization, the participating lenders have agreed to wipe out $560 million owed to them by Washington Group.

The Reno Bankruptcy Court has established Sept. 6 as the confirmation date for Washington Group's reorganization plan.

The $150 million in loans approved by the court will be used for operating expenses, company officials said. The loans may be increased to up to $350 million under certain conditions.

The court will make a final decision on June 13 as to the amount of the loans.

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