Owens Corning Offers Plan for Asbestos Claims
Bloomberg News, HealthDay News - There's hope for an early-detection test that could improve survival for people with a deadly cancer linked to asbestos exposure, researchers report.
Owens Corning filed a new bankruptcy reorganization plan aimed at wiping out the company's estimated $10.2 billion in asbestos liabilities.
The plan, filed Saturday in U.S. Bankruptcy Court in Wilmington, Del., offers those claiming injuries from Owens Corning's asbestos-laden products cash and stock in the reorganized company in exchange for their claims. Owens Corning sought Chapter 11 bankruptcy protection in October 2000 after being swamped by asbestos lawsuits.
Toledo, Ohio-based Owens Corning is one of more than 70 U.S. public companies that have sought bankruptcy protection since the early 1980s to deal with asbestos lawsuits. Asbestos, a heat-resistant material used in insulation, auto parts and construction products, causes respiratory illness. Prolonged exposure to the fibrous natural mineral has been linked to a rare form of cancer.
The head of the Congressional Budget Office told lawmakers Nov. 17 that the cost of compensating asbestos victims may total $150 billion. Senators are pushing for the creation of a fund to pay asbestos claimants and free companies from future liability on such claims.
A federal judge in Philadelphia estimated Owens Corning's current and future asbestos liabilities at about $10 billion. The company said in court papers that it had reserved $10.2 billion to deal with the lawsuits.
If creditors back the plan, the fifth the company has proposed, some debt holders would get 150% of their claims paid, according to court papers. That includes interest on the claims since the bankruptcy filing.
But if creditors reject the plan, U.S. Bankruptcy Judge Judith Fitzgerald would decide how much debt holders would receive. Those senior debt holders have $1.5 billion in claims separate from the asbestos claimants.
Owens Corning executives have noted in court papers that the company is performing well under bankruptcy protection, with income from operations rising to $452 million in 2004 from $300 million in 2002 and expected to be nearly $550 million for 2005.
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