LEXINGTON, Mass., Aug. 2 /PRNewswire/ -- Raytheon Company (NYSE: RTN)
believes a lawsuit filed today by Washington Group International (WGI) to
avoid its liability to Raytheon is without merit and that Raytheon expects to
prevail in court. Raytheon has not yet received a copy of the suit.
"The claim appears to be nothing more than a ploy to keep Raytheon from
exercising its rights as one of WGI's creditors," said Raytheon Senior Vice
President and General Counsel Neal E. Minahan. "Since WGI abandoned
construction projects and declared bankruptcy, Raytheon has stepped in to
perform on guarantees it made to customers before it sold its engineering and
construction business to WGI. The company's previously disclosed estimate of
liability represented by these guarantees and guarantees with respect to other
WGI projects is between $495 million and $825 million."
The advance payments that appear to form the basis of WGI's complaint were
fully disclosed to WGI and its lenders, bond underwriters, financial, legal
and accounting advisors. In fact, WGI disclosed these payments and the
proposed use of debt proceeds to fund the work associated with these payments
in its own bond offering documents in June 2000. In addition, these payments
were fully factored into the purchase price at closing.
"Under these circumstances, one would have to question senior executives,
board of directors and financial advisors of WGI who all said that WGI was
adequately capitalized and financed to purchase the business," Minahan added.
"We find it ironic that WGI is complaining about advance payments, given
that they received about $200 million in advance payments on the two Sithe
projects and walked off these projects in March 2001, which was immediately
before substantial payments were due to vendors and subcontractors," said
Minahan.
With respect to WGI's assertions that Raytheon grossly understated the
estimate of liabilities being assumed by WGI, Minahan rejected this charge,
noting "this was a heavily negotiated transaction involving sophisticated
parties with sophisticated legal, financial and accounting advisors, and
exhaustive due diligence by WGI and its lenders and advisors from September
1999 through the closing of the transaction in July 2000. We believe, and
will demonstrate in the bankruptcy court, that WGI and its lenders and
advisors were well aware of the financial condition of the sold business."
With headquarters in Lexington, Mass., Raytheon Company is a global
technology leader in defense, government and commercial electronics, and
business and special mission aircraft.
Contact:
David Polk
781.860.2386
SOURCE Raytheon Company
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Related links:
http://www.raytheon.com
CONTACT:
David Polk of Raytheon, +1-781-860-2386
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