Lawsuit claims Holtec made “false” statements on proposed New Mexico nuclear storage site

Internal estimates project the facility would lose $750 million in the first five years, former CFO said.

By: - July 13, 2023 10:45 am

A rendering of the proposed nuclear waste storage site by Holtec International. (Courtesy of the Nuclear Regulatory Commission)

The Florida company aiming to put an interim storage site for high-level nuclear waste in New Mexico is facing allegations of retaliating against a former executive, according to a New Jersey lawsuit.

Kevin O’Rourke claims in a civil lawsuit filed in June that he was fired as a vice president and chief financial officer for Holtec International for speaking up against “false and misleading” statements top officials at the company prepared for investors in August 2022.

Those documents included projections about the proposed Consolidated Interim Storage Facility slated for Southern New Mexico that the lawsuit called “materially false and/or completely unattainable and unrealistic.”  

O’Rourke filed his suit in June with the Superior Court of New Jersey in Camden County.

Holtec International chief executive officer Krishna Singh wanted to represent that the facility would “break even” in the first five years after opening, and asked O’Rourke to reflect that in the documents to investors, the lawsuit states. 

However, internal projections estimated the facility would instead lose $150 million each year over that period – totaling $750 million in losses – according to the lawsuit.

Other allegations included that Holtec International did not disclose a violation of a debt covenant, claimed it self-financed a $300 million manufacturing facility which it raised by “selling state tax credits,” and “grossly overstated” the annual money spent on research and development.

A Politico article, detailed the fight over $300 million in tax breaks in New Jersey to expand the Camden-based manufacturing plant. 

According to the lawsuit, the false claims were made in a prospectus (a document to attract investors) to be sent to the Hyundai Engineering and Construction company, headquartered in Seoul, South Korea.

Since 2021, Hyundai and Holtec have partnered on building the design for a small nuclear reactor called the SMR-160. They agreed to accelerate the design process in October 2022.

Holtec International denied the allegations in the lawsuit from its former VP and chief financial officer in an emailed statement.

“We have thoroughly investigated these allegations and they are entirely without merit. We look forward to our day in court,” wrote Patrick O’Brien, a Holtec spokesperson.

Emails to Hyundai went unanswered Wednesday. We will update the story if we get a response.

Holtec attorneys were granted an extension to file their response to the lawsuit in August, according to New Jersey court records.

NM ready to defend new nuclear waste bill against industry and federal opposition

This past legislative session, Senate Bill 53 banned the storage of high level nuclear wastes and stops state agencies from issuing permits to operate. That law could be put to the test since the federal government greenlit Holtec International’s license to operate in May.

John Heaton, chair for the local group Eddy-Lea Energy Alliance which bought the land for the proposed site, defended Holtec in an email to Source NM

“I would simply like to say that Holtec has been totally honest with the Eddy-Lea Alliance, and never once have they deviated from what they have promised,” Heaton said, adding that the promised investment is $2 billion to $3 billion and hundreds of jobs.

Orourke v. Holtec

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Danielle Prokop
Danielle Prokop

Danielle Prokop covers the environment and local government in Southern New Mexico for Source NM. Her coverage has delved into climate crisis on the Rio Grande, water litigation and health impacts from pollution. She is based in Las Cruces, New Mexico.