Westinghouse, nuclear power unit of Toshiba Corp., filed for Chapter 11 bankruptcy and protection from creditors on Wednesday, March 29, as Toshiba seeks to limit losses that threatened its future.
Westinghouse has a handful of money-losing nuclear construction projects over cost and behind schedule.
“The filing of Chapter 11 is a must for reconstructing Westinghouse’s business, and is also compatible with our company’s decision in cutting connections with the overseas nuclear business and its risk,” said Toshiba CEO Satoshi Tsunakawa.
Chapter 11 will let Westinghouse break or renegotiate contracts, though this will likely bring lawsuits from the utility companies who hired Westinghouse to build the power plants.
The filing will set off complicated negotiations between Toshiba, Westinghouse, and creditors, and could involve the U.S. and Japanese governments, as the United States has guaranteed loans for new nuclear reactors.
Toshiba has been selling other assets including the world’s second biggest chip manufacturing business, worth an estimated $13 million, in an effort to raise operating capital.
Toshiba’s nuclear arm Westinghouse files Chapter 11 bankruptcy
By NTD Newsroom