Summary
This 8-K filing from The Boeing Company (BA) on June 24, 2009, details the Chapter 11 bankruptcy filing of Sea Launch Company, L.L.C. and its affiliates. This event triggered guarantee obligations for Boeing, as a Sea Launch partner, to certain creditors. Boeing's immediate impact is an estimated pre-tax charge of $35 million for the second quarter of 2009. The company intends to fulfill its guarantee obligations and vigorously pursue reimbursement rights from Sea Launch and its other partners, who are obligated to cover Boeing's share based on its 40% ownership.
Key Highlights
- 1Sea Launch Company and its affiliates voluntarily filed for Chapter 11 bankruptcy on June 22, 2009.
- 2Boeing, as a guarantor, faces immediate obligations due to the bankruptcy filing triggering defaults on approximately $448 million in Sea Launch's indebtedness.
- 3Boeing expects to incur a pre-tax charge of approximately $35 million in the second quarter of 2009 related to this event.
- 4Boeing intends to honor its guarantee obligations to Sea Launch's creditors.
- 5Boeing has rights to reimbursement from Sea Launch and its other partners for payments made under the guarantees.
- 6The company will pursue its recovery rights from Sea Launch and its partners, who are obligated to contribute proportionally based on ownership.
- 7Potential additional pre-tax charges for Boeing could reach up to $478 million if reimbursement is not secured from Sea Launch or its partners.