Toshiba's Westinghouse brings in bankruptcy lawyers; disclosure deadlines loom
By Jessica DiNapoli and Makiko Yamazaki
NEW YORK/TOKYO (Reuters) - U.S. nuclear firm Westinghouse Electric Co LLC has hired bankruptcy attorneys, in a sign that owner Toshiba Corp (6502.T: Quote) is more seriously weighing a Chapter 11 filing as an option to help it rein in a multibillion dollar financial maelstrom.
People familiar with the matter said the nuclear engineering company had brought in law firm Weil Gotshal & Manges LLP as an exploratory step, and had not yet taken a decision on a bankruptcy filing.
The news comes as the Japanese conglomerate faces huge pressure to meet a Tuesday deadline to publish audited earnings, postponed a month ago so that it could probe potential problems at Westinghouse further.
It is also pushing forward with the sale of most or even all of its prized flash memory chip business, as it seeks to plug not only an upcoming $6.3 billion writedown for Westinghouse but also to create a buffer against future financial problems.
Toshiba said it was not aware of any intention for Westinghouse to file for Chapter 11 bankruptcy.
Sources familiar with the company have said, however, it is one of several options being considered as it struggles to limit losses in the United States where it is facing cost overruns at two projects. It has also hired a Japanese law firm to help estimate the impact of a U.S. bankruptcy for the broader group, those sources said.
Japanese Trade Minister Hiroshige Seko said on Wednesday that a Chapter 11 filing would not necessarily be a negative step and that Westinghouse was one topic that he may discuss with U.S. officials when he visits in the near future.
"If the U.S. side raises the issue, it will be necessary to discuss it," he told a parliamentary committee. Continued...