Exclusive - Toshiba's Westinghouse calls in U.S. bankruptcy lawyers: sources
By Jessica DiNapoli and Tom Hals
(Reuters) - Westinghouse Electric Co LLC, the U.S. nuclear power plant developer owned by troubled Japanese electronics giant Toshiba Corp, has brought in bankruptcy attorneys from law firm Weil Gotshal & Manges LLP, people familiar with the matter said on Wednesday.
The move comes after a $6.3 billion writedown at Westinghouse last month wiped out Toshiba's shareholder equity and caused it to seek divestments to create a buffer for any fresh financial problems.
A Chapter 11 bankruptcy filing by Westinghouse in the United States could help limit Toshiba's losses, two people said, cautioning that the retainment of the debt restructuring lawyers from Weil is just an exploratory step, and that no decision about a bankruptcy filing had yet been taken.
A Westinghouse spokeswoman declined to comment on Weil's role, but said that Westinghouse has hired Lisa Donahue of advisory firm AlixPartners LLP as its chief transition and development officer, to lead "an operational restructuring and financial rebuilding."
Toshiba said it is not aware of any intention for Westinghouse to file for Chapter 11 bankruptcy.
AlixPartners declined to comment, while Weil did not respond to a request for comment.
Donahue last ran restructuring efforts at debt-laden Puerto Rico utility Puerto Rico Electric Power Authority (PREPA). Westinghouse already has a working relationship with Weil, having tapped it as legal adviser last year on its acquisition of engineering services firm CB&I Stone & Webster Inc from Chicago Bridge & Iron Company NV (CB&I).
Toshiba last week asked a Japanese law firm to help estimate the potential financial impact it would face if Westinghouse files for Chapter 11 bankruptcy, sources told Reuters at the time. Continued...