Washington Group Files for Chapter 11

Washington Group International Inc., the nation’s fourth-largest construction company, said it will reorganize under Chapter 11 of the Bankruptcy Code as it pursues litigation against Raytheon Co. Boise, Idaho-based Washington also said it has received a debtor-in-possession financing facility from a group of lenders to fund operations during the restructuring.

Washington, which built Hoover Dam, said in March it faced a liquidity crisis due to a delay in resolving purchase price adjustments connected with its purchase of a Raytheon engineering and construction unit. The unit’s projects had cost overruns and negative cash flows that were allegedly not disclosed by Raytheon, a missile manufacturer based in Lexington, Mass., Washington said.

On May 4, Raytheon, maker of the Patriot missile, said the Securities and Exchange Commission was probing the sale of its engineering and construction operation to Washington Group.

Trading in Washington Group shares, which have fallen 87% this year, was halted, and the New York Stock Exchange said it has determined that the shares should be delisted.