Washington claims acquisition fraudulent

30 March 2001

Washington Group faces severe short-term liquidity problems due to substantial unforeseen costs following its acquisition of Raytheon Engineers & Constructors (RE&C). Washington has filed a suit against Raytheon alleging fraud and for breach of contract in the acquisition of RE&C. As it now requires additional time to reflect on the impact of its liquidity problems, Washington will delay filing its Annual Report for the year ended December 1, 2000 .

In July 2000 Washington Group paid Raytheon $53 million and assumed liabilities then estimated to be $450 million to acquire RE&C. The price was based on a Raytheon-prepared balance sheet. In September, the company reduced RE&C assets and increased liabilities by approximately $700 million from original estimates.

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