Owens Corning bankruptcy plan OK

Owens Corning“s plan for emerging from bankruptcy in autumn 2006 has been approved by a federal bankruptcy judge, five years after the company sought protection from creditors over health claims rela…

Owens Corning“s plan for emerging from bankruptcy in autumn 2006 has been approved by a federal bankruptcy judge, five years after the company sought protection from creditors over health claims related to its asbestos products. The plant was approved by Judge Judith Fitzgerald on 18 September 2006 after overruling some objections from alleged asbestos victims and a lawyer for one bondholder. The plan, which has an effective date of 30 October 2006, moves Owens Corning“s USD 7 billion in asbestos liabilities from the company books into a trust that will be established for the plaintiffs. The Toledo, Ohio-based US building materials maker will pay more than USD 5 billion to asbestos claimants and up to USD 2.27 billion to holders of bank debt. Existing equity will, in this way, be wiped out and millions of new stock shares will be issued. “It“s been a long road, ” said Owens Corning attorney Steven Krill. “We“re very proud of this plan.” Krill said the plan was fair to creditors and asbestos victims and allowed the company to move ahead.