A company that has been active in the area of global nuclear construction, Westinghouse Electric, recently filed for bankruptcy. News of the filing came from the company’s parent, Toshiba. The filing was for Chapter 11 bankruptcy protection, which can be a helpful way for companies in Massachusetts and elsewhere to overcome their debt struggles.
Westinghouse ended up racking up billions of dollars’ worth of cost overruns when trying to build nuclear reactors in a couple of different states. This financial issue has actually threatened the future of Toshiba. Toshiba reported in February that it would take a reduction in its books of over $6 billion as a result of the hefty cost overruns.
According to the parent company, it allowed Westinghouse to pursue bankruptcy protection so as to contain the monetary damage. Toshiba said it was planning on leaving the business of global nuclear construction in light of the recent Westinghouse situation. Utilities that were going to receive reactors from Westinghouse have claimed that Toshiba must assume responsibility for any Westinghouse-related debts connected to nuclear plants, but Toshiba officials already said the company would fight this.
A Chapter 11 bankruptcy filing offers businesses that are in financial distress the opportunity to reorganize themselves. Reorganization can enable them to get out of the financial hole and to continue operating while they are paying off their debts. An attorney in Massachusetts can help an organization to figure out if this type of bankruptcy filing is the best course of action to take in light of its particular circumstances.
Source: foxbusiness.com, “Toshiba’s Westinghouse Files For Chapter 11 Bankruptcy“, March 29, 2017