2000/10/5 Owens Corning
OWENS CORNING FILES
VOLUNTARY CHAPTER 11 PETITION TO RESOLVE ASBESTOS LIABILITY
All Operations Open and Focused on Customer Service
Owens Corning (NYSE:OWC)
today announced that, in order to address the growing demands on
its cash flow resulting from its multi-billion dollar asbestos
liability, the company has voluntarily filed for
reorganization under Chapter 11 of the U.S. Bankruptcy Code.
The filing, made today in Wilmington, Delaware, will enable Owens Corning to refocus on operating its business and serving its customers, while it develops a plan of reorganization that will resolve its asbestos and other liabilities and provide a suitable capital structure for long-term growth.
Owens Corning's asbestos liability arises from a high-temperature pipe insulation product trade-named Kaylo, which it distributed and/or manufactured from 1952 to 1972. The company's total revenues from the sale of this product were approximately $135 million. Owens Corning is a co-defendant with other former manufacturers, distributors and installers of products containing asbestos in personal injury litigation. To date, the company has received more than 460,000 asbestos personal injury claims and has paid or agreed to pay more than $5 billion for asbestos-related awards and settlements, legal expenses and claims processing fees.
The company noted that 22 other companies involved in asbestos-related activity have commenced reorganization cases under Chapter 11 of the U.S. Bankruptcy Code. Like many of these other companies, Owens Corning intends to use the special provisions of Chapter 11 relating to the resolution of asbestos claims as a process through which all asbestos claims will be evaluated and resolved with no contingent liability remaining for the company.
In August 1982,
Johns-Manville Corporation filed a petition for
reorganization under Chapter 11 of the Bankruptcy Code which automatically suspended all
personal injury lawsuits and allowed Manville Corporation
("Manville") to reorganize, thus preserving its
financial viability to compensate asbestos claimants.
In December 1986, the United States Bankruptcy Court for the Southern District of New York approved Manville's Plan of Reorganization ( the "Plan"). A cornerstone of the Plan was the creation of the Manville Personal Injury Settlement Trust (the "Trust") to compensate individuals suffering personal injury from exposure to asbestos or asbestos-containing products manufactured or sold by Manville. Following several appeals, the U.S. Court of Appeals for the Second Circuit confirmed the Plan on October 28, 1988. The Trust became operational thirty days later on November 28, 1988.