Westinghouse Files For Chapter 11, Says Employees Will Be Okay
PITTSBURGH (KDKA) -- A 22-page document filed in U.S. Bankruptcy Court on Wednesday morning made official what many have predicted.
Pittsburgh-based Westinghouse Electric, owned by the Japanese company Toshiba, wants the protection of Chapter 11 as it seeks to restructure its company and shed billions of dollars of debt caused by cost-overruns in the construction of its AP-1000 nuclear plant for customers in the United States and China.
"Today, we have taken action to put Westinghouse on a path to resolve our AP-1000 financial challenges while protecting our core businesses. We are focused on developing a plan of reorganization to emerge from Chapter 11 as a stronger company while continuing to be a global nuclear technology leader," said Jose Emeterio Gutierrez, interim CEO, in a statement.
For employees at Westinghouse, the company insists it's business as usual with no lay-offs or pay reductions.
And the company has obtained special $800 million debtor financing to help fund its core business.
In boxes checked on the court filing, Westinghouse estimates assets between $1 billion to $10 billion with liabilities of between $1 billion to $10 billion, and at least 1,000 to 5,000 creditors.
The two largest creditors in Pittsburgh are SSM Industries owed nearly $5.5 million and Accenture LLP owed nearly $3.5 million.
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So what happens next?
This bankruptcy is being heard in Southern New York, and early motions have already been filed to protect salaries and benefits for current employees.
Experts tell KDKA money editor Jon Delano that Chapter 11 can take a long time, especially when it involves a lot of money.
How long?
Perhaps as much as three years.