WASHINGTON - Owens Corning will finally emerge from bankruptcy following nearly 5 years operating under creditor protection.
United States bankruptcy Judge Judith Fitzgerald praised both sides for finally reaching an agreement following tension and sometimes chaos created by both asbestos victim's attorneys as well as representatives from company bondholders.
The company filed for protection claiming that the costs of asbestos litigation were destroying the company's financial assets.
Under the plan set to go into affect on October 30th, Owens Corning will have $7-billion USD in asbestos claims wiped from their balance sheet and shifted into a special trust. The creation and finalization will take time that some asbestos claimants (especially those with asbestosis and mesothelioma) complain they will be dead by the time they are eligible to receive compensation.
The judge countered that if claimants filed individually, the resulting bottleneck would destroy the company and many of the victims would not receive compensation given the time needed for each individual case compounded with the company's non-existent assets.
The Ohio based building products manufacturer will pay for than $5-billion USD for asbestos claims with another $2.27-billion USD to creditors. Existing equity will be erased and the company will issue millions of new shares.
In 2000, Owens Corning filed for Chapter 11 bankruptcy protection in an effort to shield itself from billions of dollars in claims related to their manufacturing of asbestos containing construction materials decades ago.
-Asbestos does not pose a risk unless it becomes damaged or loose particles become airborne during mining and manufacturing. The inhaled fibers then become stuck in the lungs and over time can cause cancer when other cells try to digest them.
-Beginning in the early 1980s large judgments have been awarded to victims and their families affected by asbestos related ailments. The resulting legal rush has bankrupted a number of large firms and created a backlog of cases that may not be decided before a victim dies.
-Plans on how to better handle asbestos litigation have become popular topics for legal review journals as well as Congressional proposals including the controversial FAIR Bill of 2005.
-Owens Corning is also synonymous with the cartoon character The Pink Panther who has served as the mascot for their insulation division since 1980.
