Stockholders Get Ballots On Mk Plan Shareholders Must Approve Proposed Reorganization

More than 7,000 Morrison Knudsen Corp. stockholders will receive ballots next week asking them to give up their shares to help save the company.

A federal bankruptcy judge on Thursday approved the document, which calls for stockholders in the Boise-based engineering and construction company to trade their shares for “warrants” that can be used to buy stock later.

The swap, part of the company’s proposed bankruptcy reorganization plan, needs approval by a simple majority of shareholders.

U.S. Bankruptcy Judge Peter Walsh in Wilmington, Del., approved the “adequacy” of the ballot, Morrison Knudsen spokesman Brent Brandon said.

The document spells out every detail of the Chapter 11 reorganization, including the shareholders’ swap and a proposal to give creditors equity in the company as payment on Morrison Knudsen debts.

Walsh’s ruling came one day after Morrison Knudsen announced a deal with an unofficial shareholders’ group designed to head off efforts to derail the reorganization so the shareholders vote can proceed.

Walsh is expected to approve the reorganization on Aug. 26.

The worldwide company founded in 1912 has struggled since former Chief Executive Officer William Agee tried to move Morrison Knudsen into mass transit and railcar manufacturing. Agee resigned early in 1995.

Morrison Knudsen’s merger with Washington Construction Group Inc. is expected to be completed in September.