CEBImagery.The Delaware Supreme Court reversed a Chancery Court ruling involving two companies that struggled with losses from the construction of nuclear power plants. (See ruling below)
The high court ruled in favor of Chicago Bridge & Iron in its dispute with Westinghouse, which is owned by Toshiba. Westinghouse has filed for Chapter 11 bankruptcy protection.
After losses in the power plant business, Chicago Bridge & Iron agreed to sell its Stone & Webster nuclear subsidiary to Westinghouse.
After a long period of no nuclear plants, the two companes were part of two nuclear power plant projects that suffered from regulatory delays and cost overruns.
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Chief Justice Leo Strine, writing for the majority and known for injecting a note of humor in his work, reported that the deal was unusual since the price was zero. He also noted the price was a Yiddish term that for zero that “sounds like an iconic linebacker” (bupkis).
Whether money would change hands was based on Stone & Webster’s working capital assets of more than $1 billion.
If the working capital number improved, Chicago Bridge & Iron would receive the excess amount, with the opposite being true if the number went below that figure.
Since Stone & Webster would have to continue in operation and incur costs, chances of working capital moving beyond the set figure were nil, the decision noted.
However, Westinghouse went on to claim that based on earnings over the years that Chicago Bridge & Iron owed it $2 billion the opposite of bupkis.
The three-justices deciding that case did not buy that argument and the matter was sent back to Chancery Court for a final determination.
Wall Street liked the decision, with Chicago Bridge & Iron Shares jumping 39 percent on news of the ruling, a gain of about half a billion dollars for the rust belt company.
