GBlist: FW: Asbestos Liability Forces Owens Corning into Chapter 11

["Maine, Bruce" <bmaine@hdrinc.com>]

FYI.

Subject: Asbestos Liability Forces Owens Corning into Chapter 11

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ASBESTOS LIABILITY FORCES
OWENS CORNING INTO CHAPTER 11

Owens Corning (Toledo, Ohio), one of the largest building materials
suppliers in the world, has voluntarily filed for reorganization under
Chapter 11 of the US Bankruptcy Code.  The company said that demands
on its cash flow from its multibillion-dollar asbestos liability forced
the action, but stressed that all of its operations are open and
serving customers.  The company's stock (OWC-NYSE), which traded
as high as $22.25 a share in the last year, plunged to $0.50 after
the announcement.

Owens Corning also announced that in order to enhance its liquidity
it has obtained a $500-million debtor-in-possession financing
commitment from Bank of America.  Upon court approval, these
funds will be available to the company to help meet its future
needs and to fulfill obligations associated with operating its
business.

The company's asbestos liability arises from a high-temperature pipe
insulation product trade-named Kaylo, which it manufactured and
distributed from 1952 to 1972.  Owens Corning has been attempting
to manage this liability for more than two decades through a
combination of out-of-court settlements, legislative and judicial
relief, and the company's National Settlement Program (NSP).
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.  However, the cost of
resolving current and future claims, together with a flurry of
recent new filings from plaintiff lawyers not participating in
the NSP, pushed the company into Chapter 11.

"We are voluntarily taking this difficult but necessary action to
resolve the company's asbestos liabilities in a manner that
legally binds all existing and future claimants," says Glen Hiner,
chairman and CEO.  "With the Chapter 11 process we can finally
put this difficult issue behind us in a fair and responsible
manner and move forward with our resources and energies focused
on competing successfully in the global marketplace."

Hiner stresses that Owens Corning is a sound company, with more than
$5 billion in annual revenues and leadership positions in all of its
businesses.  He says that the company's cost-reduction programs and
System Thinking marketing initiatives have been successful in
enabling the company to enhance its competitive position.  Despite
this success, the increasing asbestos liabilities and difficulty
of estimating its future asbestos liabilities, especially the
costs of settling current and future mesothelioma claims, made
Chapter 11 necessary.

At least 22 other companies involved in asbestos-related activity have
commenced reorganization cases under Chapter 11 of the US Bankruptcy
Code.  Questions can be directed to Owens Corning's toll-free
customer response line at +1 800 725 9350.


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