BOISE, IDAHO — The dispute between Raytheon and Washington Group International over the latter’s purchase of Raytheon’s Engineer & Construction unit continues, with Washington Group bringing its case to bankruptcy court.
In a lawsuit filed August 2 in U.S. bankruptcy court for the District of Nevada in Reno, Washington Group is seeking to recover $822 million and avoid repaying $700 million in indemnity payments to Raytheon .
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Washington Group has alleged Raytheon hid project costs during the time of the unit’s sale. Raytheon has denied the allegations, and last month estimated it would have to spend as much as $700 million to complete two Massachusetts power-plant projects abandoned by Washington Group since the purchase.
In a statement issued August 2, Raytheon asserted Washington Group’s lawsuit was an attempt to avoid its liability to Raytheon. Raytheon also stated it had not yet received a copy of the lawsuit.
Washington Group filed for Chapter 11 bankruptcy on May 14, citing financial problems related to the Engineering & Constructors purchase. It bought the unit last July for $53 million in cash and an estimated $450 million in assumed liabilities. Since that time, it has accused Raytheon of owing it $469 million in related purchase price adjustments.
This lawsuit marks the second by Washington Group against Raytheon. The company sued Raytheon in March over the alleged cost overruns in the Engineers & Constructors unit.
