Appeals court sides with Fluor in Citadel Equity conversion dispute

By Caroline Salls

Pittsburgh, Feb. 23 - The U.S. Court of Appeals for the Fifth Circuit upheld a district court ruling that Fluor Corp. does not owe Citadel Equity Fund, Ltd. $28.3 million for additional shares Citadel claims it was owed in connection with the conversion of Fluor's 1.5% convertible senior notes due 2024.

According to Tuesday's appeals court ruling, Citadel held roughly $58 million of the $330 million principal amount of the senior notes before June 2008.

After a dispute arose regarding the calculation of the number of shares of common stock Fluor owed to Citadel upon conversion of the notes, Fluor asked the U.S. District Court for the Northern District of Texas to rule that it complied with the terms of the notes indenture and did not owe Citadel more shares.

Citadel filed a counterclaim seeking $28.3 million, representing the value of the shares Citadel claimed it was owed.

The district court ruled in favor of Fluor, and Citadel took its appeal to the appeals court.

The appeals court remanded reconsideration of costs related to the appeals back to the district court.

Fluor is an Aliso Viejo, Calif.-based international engineering concern.

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