BOISE — Stockholders like Bob Marshall of Council figured Dennis Washington's rescue of the one-time international construction giant Morrison Knudsen Corp. made its reincarnation a good investment to carry him through retirement.
Marshall, 89, pinned his future on Washington Group International, buying 2,000 shares at about $12 a share. But last week Washington Group filed for federal bankruptcy law protection.
"When Dennis Washington came along, I really thought the company would go places," he said.
It is unlikely there will be any recovery for the common stock shareholders.
Marshall's investment is now virtually worthless. Some of the stockholders insist they will try any tactic to get some of their money back, from filing class-action lawsuits against Washington Group, to letter-writing campaigns to get the Securities and Exchange Commission involved, to lobbying members of Congress to look into the matter.
Marshall said he cannot understand how the company could not find a way out of its financial troubles. It employs many former employees of Morrison Knudsen, which built Hoover Dam.
Since the Montana billionaire copper and shipping magnate bailed out Morrison Knudsen in 1996, Washington Group was turning in solid financial results.
In its last public quarterly report, issued in October, the company reported a $6.6 billion backlog of work and had revenues of $2.05 billion for the first nine months of the year.
However, no financial information was revealed after October, leading some shareholders to suspect the company was in financial turmoil before blaming all its woes on Raytheon Co.
Washington Group officials say the acquisition of Raytheon Engineers & Constructors, which closed last July, caused the company to file bankruptcy because Raytheon Co. hid liabilities attached to the troubled unit and overstated its assets.
Washington Group sued Raytheon for fraud, and 4th District Judge Deborah Bail of Boise on Saturday ordered Raytheon to turn over an audited balance sheet covering the transaction.
One Washington shareholder, Robert Perkins of Wildwood, Mo., has filed a petition with the U.S. Bankruptcy Court in Reno, Nev., where the case is filed, objecting to the company's reorganization plan.
Shareholder Vince Burke, 74, from Las Vegas said several attorneys wanting to file class-action lawsuits are enlisting shareholders through the Internet for a future filing.