Court hearings on the sum that Owens Corning should allocate to pay asbestos personal injury claims will proceed as planned on 13 January 2005 following a ruling on 22 November 2004 by U.S. District J…
Court hearings on the sum that Owens Corning should allocate to pay asbestos personal injury claims will proceed as planned on 13 January 2005 following a ruling on 22 November 2004 by U.S. District Judge John Fullam, who is overseeing the bankruptcy reorganization of the building materials manufacturer. Fullam refused to delay proceedings to estimate the company“s asbestos liabilities, as had been requested by holders of bank debt. The decision on asbestos claims will affect Owens Corning“s plan of reorganization, which proposes paying both personal injury claimants and financial creditors with shares in a reorganized company; more money for asbestos claimants will mean less for holders of bank debt. Fullam denied a request from Credit Suisse First Boston to delay the asbestos claims estimation proceeding for a protracted challenge that would have involved extensive examination of claimants“ medical records. While he refused to slow the action and thus paved the way to a faster exit from Chapter 11, the judge signaled he was not ready to disregard bank arguments that Owens Corning had overestimated its asbestos liabilities. “There is language in the opinion that financial creditors could take some comfort in,” said J. Andrew Rahl, attorney for an official group of trade creditors and bondholders in the case. Fullam cited “substantial evidence to support the notion that Owens Corning“s history of dealing with asbestos claims has included payments to large numbers of claimants who actually sustained little or no harm from their exposure to Owens Corning“s products.” Like other companies that resorted to bankruptcy protection in an effort to survive multiple tort claims, Owens Corning had tried for years before its Chapter 11 filing to settle as many lawsuits as possible. At the 13 January 2004 hearing, experts will debate how many among the hundreds of thousands of claims for asbestos damages that cite Owens Corning as a defendant are legitimate and traceable to the building materials company.