WPPSS Approves Deal to Stay Clear of Fraud Case
The executive board of the Washington Public Power Supply System on Friday approved an agreement to remove WPPSS as a defendant in a massive securities fraud case over the default on $2.25 billion in bonds sold to finance two ill-fated nuclear projects.
The 11-member board unanimously voted its approval. The agreement still must be approved by U.S. District Judge William Browning, who will preside over the complex securities trial beginning Wednesday in Tucson, Ariz.
In approving the pact, WPPSS agreed to turn over to bondholders any revenue from sale of assets or other activities related to its unfinished nuclear plants 4 and 5.
Construction of the nuclear plants, which were millions of dollars over budget and years behind schedule, was terminated in 1982 after revised power load forecast for the region showed power from the reactors would not be needed. The supply system defaulted on the bonds the next year, prompting bondholders to sue to recover their investments.
The total amount, including principle and projected interest for the 30-year life of the bonds, comes to more than $7 billion.
Under the agreement approved Friday, WPPSS also said it would make available its personnel to testify at the trial in Tucson.
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