The Delaware Supreme Court closed out much of the monetary dispute between Westinghouse Electric Company and Chicago Bridge & Iron Co. this week, ruling that historical accounting practices at CB&I were not material in a cost adjustment case between the two companies.
Westinghouse has been seeking a $2 billion cost adjustment on its 2015 purchase of CB&I, much of that based on prior accounting practices at CB&I that Westinghouse claimed were substandard. The court, however, ruled that those accounting practices should not be considered by an arbitrator reviewing the costs of the deal.
A CB&I attorney, Daniel Scott, told The New York Times that the dispute has effectively been whittled down from $2 billion to about $70 million and that there was no appeal available to Westinghouse. The court sent the adjustment ruling back to the Delaware Chancery Court, which had previously ruled in Westinghouse's favor.
The decision had an immediate impact on the stock market. Shares of Westinghouse parent Toshiba dropped, while CB&I shares experienced their biggest one-day gain in the company's history.
CB&I had been seeking a $428 million adjustment, the Times said.
Later in the week, Westinghouse announced that company President and Chief Executive Officer Jose Gutierrez would be keeping those posts, which originally were assigned to him, in June 2016, on an interim basis.
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