Westinghouse Electric Company failed to obtain court approval of a motion to continue and renew its surety bond program at a hearing this morning, with the company’s bankruptcy judge advising parties to go “back to the drawing board.”
Judge Michael Wiles of the US Bankruptcy Court for the Southern District of New York said Westinghouse’s motion had not made it clear the extent to which it was converting prepetition obligations into postpetition obligations, has not provided adequate notice to creditors, and overall does not provide adequate information.
“This is pretty half-baked, if you don’t mind my saying,” the judge said. “I think you need to go back and talk about what these all are. I’m sure there’s a form of this order that I will approve… I think you need to take a little more time and go back to the drawing board and you’ll be able to get what you need. But it’s not quite there yet.”
The debtor in its motion reported USD 20.2m in outstanding surety bonds, and the company pays the issuers USD 400,000 in annual premiums to maintain the surety bond program.
Westinghouse is a subsidiary of Toshiba, and its technology is used in 60% of US nuclear power plants. The company filed for Chapter 11 on 29 March blaming a series of delays, litigation and costs associated with the construction of two nuclear power plants. An order earlier this month extended the company’s exclusive plan filing periods, giving Westinghouse until 6 December to file a Chapter 11 plan.