$92-Million Part Settlement OKd in WPPSS Default
A $92-million partial settlement has been reached in the giant Washington Public Power Supply System lawsuit stemming from the system’s default on bonds that financed two abandoned nuclear power plants.
Junius Hoffman, a settlement master appointed by a federal court, said today that underwriters have agreed to pay bondholders to settle their involvement in the class-action suit.
Hoffman noted the settlement is only partial because of the many defendants named in the suit, including WPPSS itself, Northwest Utilities, various officials and construction companies.
The settlement is subject to approval by U.S. District Judge William Browning of Tucson, Ariz.
Four major brokerage firms agreeing to the settlement are Merrill Lynch & Co. Inc., Salomon Brothers Inc., Smith Barney, Harris Upham & Co. and Prudential-Bache Securities Inc.
The lawsuit was filed after WPPSS defaulted on bonds to build nuclear plants WPPSS No. 4 at the Hanford nuclear reservation, and No. 5 at Satsop, west of Olympia. The default was the biggest ever in the municipal bond market.
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