Court Says Shareholder Suit Against Raytheon Can Move Forward, Hagens Berman Announces; Order Validates Claims by Washington Group Shareholders.Business Editors, Legal Writers BOISE, Idaho--(BUSINESS WIRE)--May 6, 2002 A shareholder suit filed against Raytheon Corp (NYSE NYSE See: New York Stock Exchange :RTN RTN Return RTN Raytheon Company (stock symbol) RTN Research Training Network RTN Rotarian RTN Routing Transit Number RTN Recursive Transition Network RTN Register Transfer Notation RTN Radial Tangential Normal ) recently received the green light to move forward from a U.S. District court, overcoming legal objections raised by Raytheon. The suit represents shareholders of Washington Group International, Inc., who claim Raytheon's allegedly fraudulent financial statements cost them hundreds of millions of dollars in investment losses. Finding the company's arguments 'unpersuasive,' Judge B. Lynn Winmill, chief justice for the U.S. District court for the District of Idaho denied Raytheon's motion to dismiss the suit, validating the claims of Washington Group stockholders and allowing the suit to move forward. Filed on June 20, 2001 by attorney Steve Berman This article is about the writer. For the lawyer, see Steve Berman (lawyer); for the Mayor of Gilbert, Arizona see Steven M. Berman. Steve Berman is an American writer, born in Philadelphia, Pennsylvania, and now living in New Jersey. of Hagens Berman, the suit charges that Raytheon deliberately misrepresented the true financial condition of its Raytheon Engineers & Constructors (RE&C) division in order to sell this division to the Washington Group at an artificially inflated price. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the suit, RE&C failed to disclose massive cost overruns Noun 1. cost overrun - excess of cost over budget; "the cost overrun necessitated an additional allocation of funds in the budget" cost - the total spent for goods or services including money and time and labor of approximately $700 million to investors. On March 2, 2001, Raytheon refused to honor its previously disclosed contractual commitments to reimburse re·im·burse tr.v. re·im·bursed, re·im·burs·ing, re·im·burs·es 1. To repay (money spent); refund. 2. To pay back or compensate (another party) for money spent or losses incurred. Washington Group for RE&C's cost overruns, the suit claims. Following this announcement, the price of Washington Group stock plummeted 80 percent, from $8.00 per share to $1.65 per share, a market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. loss of more than $400 million to stockholders, and more than $200 million to bondholders. Ultimately, these cash shortages forced Washington Group to seek protection under the bankruptcy laws on March 14, 2001. The class action suit is seeking to reimburse all Washington Group investors during the period from April 17, 2000 through March 1, 2001. "We join the thousands of Washington Group shareholders in applauding the court's ruling," said Steve Berman. "We are looking forward to pressing ahead and proving our case in the court system." Raytheon asked the court to dismiss the suit, citing a number of legal objections, including a claim that the plaintiffs lacked standing and were acting on Washington Group's behalf. The court rejected every claim brought by Raytheon. About Hagens Berman Steve Berman is managing partner of Hagens Berman in Seattle. Recently named co-lead counsel in litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. to recover losses from Enron employees' retirement funds, Berman is a nationally recognized expert in class action litigation. Berman represented Idaho and 12 other states in lawsuits against the tobacco industry that resulted in the largest settlement in the history of litigation. Berman also served as counsel in several other high-profile cases including the Washington Public Power Supply litigation, which resulted in a settlement of more than $850 million, and the $92.5 million settlement of The Boeing Company litigation. Other cases include litigation involving the Exxon Valdez oil spill The Exxon Valdez Oil Spill is considered one of the most devastating man-made environmental disasters ever to occur at sea. Prince William Sound's remote location (accessible only by helicopter and boat) made government and industry response efforts difficult and severely taxed ; Louisiana Pacific Siding; Morrison Knudsen; Piper Jaffrey; Nordstrom; Boston Chicken; and Noah's Bagels. |
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