Hanford group completes bankruptcy reorganization

Published Nov. 15, 2001

John Stang
Herald staff writer

Washington Group International -Êa major player in Hanford's waste glassification project and the Umatilla Chemical Depot -Êhas nearly completed its bankruptcy reorganization.

Boise-based Washington Group expects a federal judge to approve the reorganization plan soon in U.S. Bankruptcy Court in Reno, Nev., where it filed for Chapter 11 bankruptcy last May.

That filing and the pending approval of its reorganization are not expected to affect the firm's work on efforts to build a complex to convert Hanford's radioactive tank wastes into glass, said Bill Poulson, the Bechtel team's operations manager and the project's highest-ranking official from Washington Group.

His company is the permanent primary subcontractor in Bechtel National's glassification team. Washington Group's role in the project is to provide technical expertise from its glassification plants at Savannah River, S.C., and West Valley, N.Y. Washington Group bought those projects in 1999 from Westinghouse Electric Co.

Right now Washington Group employs about 220 people on Bechtel's glassification team of about 1,500 workers and also is in charge of building and operating an incinerator to destroy 7.4 million pounds of deadly nerve and mustard gas agents at the Army's chemical depot, a project that employs about 500.

The company inherited the Umatilla project when it bought Raytheon Engineers & Constructors for $53 million from Raytheon Co. in July 2000. Washington Group has blamed that purchase for its financial woes.

Last March Washington Group filed a suit in U.S. District Court in Idaho, claiming Raytheon hid $450 million in liabilities on the projects it sold. Raytheon has denied those allegations and filed counterlitigation in the bankruptcy court. Meanwhile, Washington Group encountered major cash flow problems and defaulted on some projects.

As part of the Chapter 11 reorganization, Washington Group and Raytheon dropped all their litigation.

The reorganization has many of Washington Group's creditors trading their claims in for equity in the corporation.

The company's secured lenders will receive 80 percent of the primary equity in the revamped corporation plus $20 million in cash, Washington Group said. The company's unsecured creditors will receive 20 percent of the primary equity and some other benefits.

"We will have a strong balance sheet, a net worth of approximately $500 million, and no debt except for draws under the working capital facility," Washington Group President Stephen Hanks said in a press release.

 

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