McDermott Announces District Court Action on Babcock & Wilcox's Chapter 11 Plan of Reorganization
18 January 2006 - 10:52AM
Business Wire
McDermott International, Inc. (NYSE:MDR) ("McDermott" or "Company")
announced today that on January 17, 2006, the Honorable Judge Sarah
S. Vance of the United States District Court for the Eastern
District of Louisiana issued an order confirming The Babcock &
Wilcox Company ("B&W") Chapter 11 Joint Plan of Reorganization
(the "Plan") and the associated proposed settlement agreement.
There were no appeals from or objections to the Bankruptcy Court's
order recommending confirmation of the Plan and approval of the
settlement agreement. After the required 30-day appeal period from
the District Court order, McDermott anticipates that the B&W
Plan and all ancillary agreements will become effective and fully
consummated. "This is an important day for McDermott, our
shareholders, B&W's customers and the asbestos-related
claimants," said Bruce W. Wilkinson, Chairman and Chief Executive
Officer of McDermott. "After close to 6 years in the courts, it
appears that the resolution of B&W's bankruptcy is imminent.
There is still work to be accomplished in this process, but I am
looking forward to soon having the B&W business back for
shareholders as part of McDermott's reported financial results.
Once the settlement is complete, McDermott will again be a
worldwide energy services company with focus on coal, nuclear and
oil & gas projects." B&W, a wholly owned subsidiary of
McDermott, filed for Chapter 11 bankruptcy in New Orleans,
Louisiana, on February 22, 2000 as a result of asbestos-related
claims. Since filing for Chapter 11 protection, B&W has been
deconsolidated from McDermott's reported financial statements.
During the 2002 fiscal year, McDermott wrote-off its remaining
investment in B&W. On August 29, 2005, B&W, McDermott, the
Asbestos Claimants Committee and the Future Asbestos-Related
Claimants' Representative reached an agreement in principle on the
terms of the currently proposed Plan and associated settlement.
Once the Plan becomes effective, B&W will be reconsolidated in
McDermott's financial statements. Remaining items required for the
Plan to become effective include receiving McDermott's shareholder
approval, obtaining exit financing for B&W and the completion
of certain other conditions by February 22, 2006, the effective
date deadline under the Plan. In accordance with the Safe Harbor
provisions of the Private Securities Litigation Reform Act of 1995,
McDermott cautions that statements in this press release which are
forward-looking and provide other than historical information
involve risks and uncertainties that may impact McDermott's actual
results of operations. The forward-looking statements in this press
release include statements regarding McDermott's expectation and
timing of the effectiveness of the Plan and reconsolidation of
B&W and the Company's position and focus thereafter. Although
McDermott's management believes that the expectations reflected in
those forward-looking statements are reasonable, McDermott can give
no assurance that those expectations will prove to have been
correct. Those statements are made based on various underlying
assumptions and are subject to numerous uncertainties and risks
including, without limitation, that remaining conditions to the
Plan my not be satisfied within the time required by the Plan. If
one or more of these risks materialize, or if underlying
assumptions prove incorrect, actual results may vary materially
from those expected. For a more complete discussion of these risk
factors, please see McDermott's annual report for the year ended
December 31, 2004 and its 2005 quarterly reports filed with the
Securities and Exchange Commission. McDermott International, Inc.
is a leading worldwide energy services company. The Company's
subsidiaries provide engineering, fabrication, installation,
procurement, research, manufacturing, environmental systems,
project management and facility management services to a variety of
customers in the energy and power industries, including the U.S.
Department of Energy. Additional information on McDermott can be
obtained at www.mcdermott.com.
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