Judge clears path for NuScale sale
By Erik Siemers, Business Journal staff writer
Business Journal staff writer
A federal court judge on Tuesday rejected a third-party's request to make a competing bid to buy a controlling stake in Corvallis-based NuScale Power Inc.
Ramon Illarramendi had asked the U.S. District Court in Connecticut to provide a due diligence period so he could put in a bid to compete with an offer from a division of Texas-based engineering giant Fluor Corp.
Illarramendi is the father of Francisco Illarramendi, who ran a hedge fund that -- in addition to being NuScale's primary source of funding -- was described by prosecutors as a Ponzi scheme, putting the Corvallis-based nuclear energy startup in financial turmoil.
Ramon Illarramendi, who says he played no role in his son’s hedge fund, told the court earlier this month that he believes the receiver will sell the ownership stake in NuScale at a rate below fair market value without giving him a chance to put in a competing bid.
But U.S. District Court Judge Janet Bond Arterton rejected his request, saying Illarramendi hasn't proven he could finance a bid and pointing to the unwillingness of NuScale to work with him.
NuScale, which is developing scalable nuclear reactor technology created at Oregon State University, furloughed most of its 100-person work force and halted most of its operations in March after its primary financial backer, the Francisco Illarramendi-led Michael Kenwood Group, became the focus of a federal U.S. Securities & Exchange Commission probe.
A controlling stake in the company that had been held by the Michael Kenwood Group was put in the hands of a court-appointed receiver.
According to court documents, NuScale began negotiations with Fluor in June and received a $3.8 million bridge loan. Now Fluor Enterprises Inc., a unit of Irving, Texas-based Fluor (NYSE: FLR), has pledged to invest at least $30 million in Nuscale after purchasing the controlling interest from the receiver.
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