ASBESTOS NEWS DAILY - Asbestos Bankruptcy Claims
Asbestos Mesothelioma: Asbestos Bankruptcy Claims
We connect you with experienced Asbestos Bankruptcy Claims Mesothelioma Asbestos lawyers. If have been diagnosed with Mesothelioma or an Asbestos related illness we can help you file a claim.
Asbestos Bankruptcy Claims diagnosed with Mesothelioma and other Asbestos related diseases have legal options and may seek compensation through Mesothelioma litigation.
Filing a claim against the companies that are responsible for your asbestos exposure will help you gain compensation for medical costs and pain and suffering associated with asbestos-related illnesses. A Mesothelioma lawyer can help you pursue compensation for the following things:
- Lost income
- Medical bills
- Group support for yourself and loved ones
- End-of-life expenses
We help patients and their families make educated, informed decisions about how to proceed with filing Mesothelioma, Asbestosis and other asbestos-related cancer claims.
We will walk you through the entire process of connecting with an experienced Asbestos Bankruptcy Claims Mesothelioma Lawyer and also help you find a qualified Mesothelioma doctor.
Bankruptcy Court – Asbestos Company – Asbestos Bankruptcy Claims
Asbestos claims lead RPM Int'l units to bankruptcy
Tue Jun 1, 2010 11:42am EDT
* RPM units files for bankruptcy due to asbestos claims
* More than 10,000 asbestos lawsuits filed
* Shares of RPM slip 0.8 percent
By Tom Hals
WILMINGTON, Delaware., June 1 (Reuters) - Subsidiaries of RPM International Inc (RPM.N) filed for bankruptcy as the chemical company seeks to resolve thousands ofasbestos-related lawsuits, according to court documents.
The parent company also asked thebankruptcy court for an injunction to prevent it from becoming a target of the plaintiffs who brought asbestos lawsuits against thebankrupt subsidiaries, according to court documents filed on Monday.
The bankrupt subsidiaries, Specialty Products Holding Corp and Bondex International Inc, are planning to use Chapter 11 to establish a trust for the payment of asbestos-related claims.
Special Products Holding is a direct parent to operating companies that produce coatings and finishings, including DayGlo Color Corp, the world's largest producer of daylight florescent pigments.
The operating companies and RPM International are not part of the bankruptcy.
The two subsidiaries also want a permanent injunction from any further asbestos claims due to products they made or sold.
"This action has been taken to once and for all resolve the asbestos-related Bondex legacy liability," said Frank Sullivan, RPM's chairman and chief executive officer, in a statement.
Many of the alleged asbestosliabilities, that are at the heart of more than 10,000 lawsuits against the bankrupt subsidiaries, stem from Reardon Co, which was acquired in 1966. Reardon sold home patch and repair products that contained asbestos until 1977, and other products containing asbestos into the 1980s.
The bankrupt subsidiaries also sold other products containing asbestos until 1972.
Asbestos is a naturally occurring mineral that was once widely used in manufacturing. It has been banned by theU.S. government after it was proven to cause cancer, often in people who were exposed by breathing in asbestos particles.
The bankrupt subsidiaries had fiscal year 2009 revenues of $329 million and $19 million of pretax income, which is less than 11 percent of RPM's consolidated total.
Until 2003, insurance covered 90 percent of the asbestos-related costs, according to court documents. Since then, insurers have claimed exhaustion and stopped making payments.
In 2005 to 2009, the bankrupt subsidiaries have incurred asbestos costs between $60 million and $82 million annually.
Asbestos-related claims have forced many companies into bankruptcy.
Specialty chemical makers W.R. Grace & Co (GRA.N), for example, has been operating in Chapter 11 since 2001. Babcock & Wilcox used bankruptcy to establish an asbestos trust that has been accepting claims since 2006.
Several attorneys who have brought lawsuits against Bondex did not immediately return calls for comment.
Shares of RPM International were down 0.8 percent at $19.66 in late morning trading on the New York Stock Exchange.
The case is In re Specialty Products Holding Corp,U.S. Bankruptcy Court, District of Delaware, No. 10-11780. (Reporting by Tom Hals; Editing by Tim Dobbyn)
Chapter 11 Bankruptcy Asbestos – Asbestos Legal–Asbestos History
A Brief History of Asbestos
Posted: Aug 03, 2008
Asbestos is a naturally-occurring fibrous mineral ofmetamorpic hydrous magnesium silicate. The term "metamorphic" is used to describe a process of extreme heat and pressure which creates specific secondary patterns of minerals with new chemical and/or physical properties.
As the primary rock is heated andrecooled, silicate crystals align in long rows of mineral fibers, which easily separate into tiny shards thinner than a human hair. Asbestos fibers are not a health risk as long as they are undisturbed. However, when asbestos is undergoes natural weathering, or is mined and processed, the microscopic particles waft into the air and cause disease if they are inhaled.
Asbestosis occurs when an inhaled asbestos particle irritates the body's naturaldefence mechanisms, causing inflammation and scarring which eventually restricts lung function.Mesothelioma is a malignant tumor of the membranes surrounding the heart, lungs and abdominal cavity. Asbestos can also cause cancer of the mouth, throat, esophagus, larynx, stomach, lung and lymphoid tissue.
Asbestos exposure can also cause non-fatal illnesses such as asbestos warts, caused when asbestos fibers are lodged in the skin, causing lumps of scar tissue to form around the irritant in the same manner as they do in the lungs to cause asbestosis; pleural plaques, discrete, sometimes calcified fibrous lesions which can be seen on X-rays but are too small to cause breathing impairment; and diffuse pleural thickening, which can cause breathing impairment if it is extensive.
Due to its fire resistant properties, asbestos has been used historically for household and industrial purposes. It has been found woven into burial cloths in ancientEgypt, and Charlemagne reportedly had a tablecloth made of asbestos which he would throw into a fire to clean.
In World War II asbestos was considered so important by the War Department that it was considered a strategic material, and many American workers were exposed in the World War II boom in shipbuilding. After the war, it was widely used in the construction industry.
In modern Western society, it was used for such diverse purposes as lamp wicks, brake shoes, oven insulation, electrical hotplate wiring and home insulation, roofing and flooring. For instance, some kinds of vermiculite used in home insulation into the 1970s contained asbestos. The EPA banned this product in 1977.
When a home owner discovers asbestos in an old home, it should not be a cause for immediate panic. If the asbestos looks intact and is notpulverised, it is best to leave it alone. However, because of legal liability, schools and businesses containing asbestos usually must undergo a costly removal process, hazardous in itself because disturbing the stable asbestos product causes fibers to fill the air. Special equipment must be used to insure that the removal process does not cause health problems where non existed before.
Mostindustrialised nations have reduced or banned the use of asbestos for at least 30 years and now use fiberglass or woven ceramic fiber as a substitute, but since asbestos-caused disease has a latency period of up to 50 years, patients are still presenting with these illness today. Every year inAmerica, approximately 3000 new cases ofmesothelioma are diagnosed, and 550 deaths occurs due to asbestosis. According to the March 1991 Report of the Judicial Conference Ad Hoc Committee on Asbestos Litigation, asbestos exposure has caused the deaths of approximately 200,000 to 265,000 Americans.
Asbestos use peaked in theUnited States in 1973, when 1 million tons of the material were used. The EPA attempted to institute a complete legal ban on the use of asbestos products in 1989; however, this ban was largely eviscerated by the US 5th Circuit Court of Appeals in 1991, and some restricted use of asbestos, albeit in fewer products than before, resumed. Therefore, even today some workers are being exposed to this toxic material.
Asbestos is a serious continuing concern to the Environmental Protection Agency, and their website has detailed information on asbestos and its removal.
Concerns about the health risks of asbestos exposure date back to 1898, when the Chief Inspector of Factories of theUnited Kingdom reported to Parliament in his Annual Report about the "evil effects of asbestos dust". He noted that the "sharp, glass like nature of the particles" when allowed to remain suspended in the air, "have been found to be injurious, as might have been expected". In 1906 a British Parliamentary Commission confirmed the first cases of asbestos-related deaths in British factories and called for improved ventilation and other safety measures. In 1918 an American insurance company produced a study showing premature deaths in the asbestos industry in theUnited States and in 1926 the Massachusetts Industrial Accidents Board processed the first successful claim by a sick asbestos worker.
Today, lawsuits claiming compensation for asbestos-related illnesses are a growth industry in the legal profession. An internet search of "mesothelioma lawyer" yields 1,910,000 results. The original manufacturers of asbestos products have long since been driven intoChapter 11 bankruptcy; plaintiffs have now turned to suing corporations with peripheral connections to asbestos products. More than 70 American corporations have filedChapter 11 bankruptcy in due to asbestos liability claims.
Since the 1970's, approximately 6% of all lawsuits filed in American courts have been asbestos-related. The lawsuits now facing the courts have been described as "an elephantine mass" by the US Supreme Court, and are expected to cost between 200 to 275 billion dollars to settle. Asbestos liability is one of the largest issues facing the global insurance industry today.
Most epidemiological studies expected the number of lawsuits to peak in the 1990s, but this has not occurred, either because of the long latency period of asbestos-related diseases, or because legal action is becoming more popular among asbestos-exposed members of the public due to high-profile legal cases and widespread advertising by attorneys who specialize in such cases.
Many complaints have been made by representatives of industries facing lawsuits and the insurance companies who will be expected to pay them that the asbestos-lawsuit industry is rife with fraud, with less that half of all payouts reaching the plaintiffs. Aggressive, ambulance-chasing lawyers are said to exaggerate medical disability and coach clients on their testimony.
The group of plaintiffs includes not only ill people, but also those who have merely have a history of asbestos exposure and want compensation for potential future health risks. According to theAmericanAcademy ofActuraries Mass Tort Work Group, more than 100 million Americans have been exposed to asbestos in their workplace during the past century.
Christian Ward - About the Author:
Christian is an author of several articles pertaining to No Win No Fee, Compensation Claims, Work Accident Claims, Personal Injury Claims and other legal articles.
Read more: http://www.articlesbase.com/personal-injury-articles/a-brief-history-of-asbestos-507855.html#ixzz0pGoSBlC1
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Honeywell International – Asbestos Company - $53.5 Million Asbestos Verdict
Honeywell Says Asbestos Verdict Was More Than It Had Disclosed
By ALEX BERENSON
Published: April 18, 2002
Honeywell International appears to have misinformed analysts and shareholders about how much of a $53.5 million verdict it is responsible for paying in the case of a man who died of a cancer caused by asbestos.
When the judgment was announced on Feb. 8 in a Manhattan court, Honeywell's stock dove as much as 11 percent during the day, shaving $3 billion off its market value. Honeywell's shares quickly rebounded after the company said it had been found liable for less than $1.1 million of the verdict, a figure that made its way into Wall Street analysts' reports. But the company's statement immediately raised questions among lawyers who had followed the case but were not involved in it. Those lawyers, who included both plaintiff and defense attorneys, said the company's true responsibility was much greater.
Honeywell now says that it must pay at least $11 million of the judgment, according to Peter M. Kreindler, its general counsel. Mr. Kreindler said Honeywell planned to appeal the verdict and had not misled investors about its size. The company does not face financially significant liability from asbestos cases, he said, and has $2 billion in asbestos insurance.
Although $11 million is minor for a company Honeywell's size, investors are nervous about Honeywell's asbestos liabilities. Last winter, investors punished the stocks of several major companies like Halliburton and 3M after a series of multimillion-dollar asbestos verdicts. The companies generally say that they do not expect the litigation to damage their financial health, but most have not discussed their liabilities in detail.
Honeywell faces about 50,000 asbestos injury claims, including nearly 1,000 claims from people suffering from the cancer in this case, mesothelioma. The North American Refractories Company, a former unit of AlliedSignal, which merged with Honeywell in 1999, made bricks that contained asbestos. That business faces an additional 116,000asbestos claims andfiled for bankruptcy in January.
In addition, Honeywell may be an especially ripe target for plaintiffs because a manager at Bendix, the Honeywell subsidiary that is the target of the suits because it makes brake linings that once contained asbestos, wrote in a 1966 letter that his response to concerns about asbestos was: ''If you have enjoyed a good life while working with asbestos products why not die from it.''
Based in Morristown, N.J., Honeywell makes everything from specialty chemicals to electronic equipment for aircraft. The company has 115,000 employees and a market value of nearly $33 billion.
The judgment in February, the largest ever for a single plaintiff in an asbestos case, was awarded to Patricia Brown, the wife of Stephen Brown. Mr. Brown, a former brake mechanic and coast guardsman, died of mesothelioma in December 2000.
The jury found Bendix 2.35 percent responsible for Mr. Brown's death. Under most circumstances, that finding would mean Honeywell is responsible for paying 2.35 percent, or $1.26 million, of the verdict under New York state law.
In his comments on the case, Thomas B. Crane, a Honeywell spokesman, emphasized the 2.35 percent figure to reporters and analysts. Mr. Crane said Honeywell's portion of the verdict ''was 2.3 percent,'' according to the Dow Jones Newswires. Bloomberg News reported that Mr. Crane had ''estimated the amount at about $1.06 million.''
Wall Street analysts who follow Honeywell accepted the company's explanation and figures.
Harriet C. Baldwin, an analyst for Deutsche Bank, wrote in a report on Feb. 11 that Honeywell's share of the case was $1.1 million and would be covered by insurance. In an interview this week, Ms. Baldwin recalled that ''that verdict was just over $1 million.'' Similarly, Phua K. Young, an analyst for Merrill Lynch, wrote, referring to the company by its stock symbol, that ''according to HON, if they are successful the possible monetary outcome for the company could be something less (possibly materially less) than the current share of $1.2 million.''
Asbestos Bankruptcy – Asbestos Trades – Asbestos Deaths
Asbestos Lawsuit for Libby Montana Vermiculate Mine Workers
Jun 13, 2003 | AP
Hundreds of mine workers in Helena, Montana, became ill or died while the state wrongly kept studies secret that documented the dangers of asbestos, former mine workers allege in a lawsuit about to be argued in the state's highest court.
Eight former mine workers and the wife of one miner are plaintiffs in the suit, which contends the state knew as early as 1956 of dangers posed by exposure to asbestos dust from a vermiculite mine in Libby.
The nine plaintiffs, all diagnosed with asbestos-related health problems, believe the state was negligent in failing to warn them and their families of the risks. They are seeking unspecified damages.
The case, to be argued June 26 before the Montana Supreme Court, appeals an August decision by District Judge Jeffrey Sherlock, who threw out the suit after concluding the state had no legal obligation to warn Libby residents of the danger.
In their appeal, the nine residents contend the state stood by while a "human disaster of epic proportions unfolded in Libby."
Libby was once home to a vermiculite mine operated by W.R. Grace & Co. from 1963 until it closed in 1990. The company is now in bankruptcy.
Asbestos in the vermiculite ore has been blamed for hundreds of illnesses and at least 200 deaths. The Environmental Protection Agency has been cleaning up the mine site and other contaminated areas in the town since 1999, and Libby was declared a Superfund site last October.
A federal study in 2000 found the death rate in Libby from all asbestos-related illnesses had been 60 times the national average.
Twenty-three cases of mesothelioma, a rare type of asbestos-related cancer, apparently have their origins in Libby, said Paul Peronard, Libby's EPA coordinator. That is a rate of one case for every 1,000 residents, 100 times the national average, according to the EPA.
The state argues that state law and an attorney general's opinion demanded that the government keep secret the information it gathered in a series of seven studies from 1956 to 1974.
The state had no obligation to warn Libby residents, and no power to set standards to asbestos exposure or regulate mine safety, the government argues. Also, government was immune from suits for actions before the new Montana Constitution eliminated that protection in 1973, state lawyers said.
The state also contends the law requires employers not the state to ensure a safe workplace, even if the government conducted limited inspections of the site.
In his ruling last year throwing out the suit, Sherlock noted that the claims against the state did not come up until afterGrace filed for bankruptcy, effectively halting scores of lawsuits filed against the company by current and formerLibby residents.
- Associated Press
Asbestos Bankruptcy – Asbestos Company – Asbestos Lawsuit
Asbestos Suits Become More Widespread
Sep 26, 2002 | The Los Angeles Times
Asbestos litigation has ensnared more than 6,000 companies--triple previous estimates--and is affecting nearly every industry, a Rand Institute study said Wednesday.
U.S. companies have paid out $54 billion on more than 600,000asbestos injury claims filed since the early 1970s, the Rand Institute for Civil Justice reported. Asbestos claims ultimately could cost as much as $210 billion, according to projections cited in the study, and more than 60 companies--22 of them in the last two years--have sought bankruptcy protection to staunch their losses.
The rising cost of the lawsuits has brought calls for reforms, and on Wednesday corporate defenders, insurers and lawyers for asbestos-related cancer victims seized on theRand report as evidence of the need for change in a hearing on asbestos litigation before the Senate Judiciary Committee.
The hearing coincided with this week's opening of a massive class-action suit inWest Virginia involving more than 5,000 plaintiffs and dozens of corporations including Exxon Mobil Corp., Owens-Illinois Inc., Westinghouse Electric Corp. and Union Carbide, now part of Dow Chemical Co.
In a measure of the breadth of the litigation, Rand found asbestos suits had been filed against companies in 75 of 83 industry sectors tracked by the government, said Stephen Carroll, the Rand senior economist who headed the study.
"Thebankruptcies are the tip of the iceberg," Carroll said. "Under the surface there are a lot of corporations that are being hit hard by asbestos liabilities and they are putting their money into compensation payments instead of investment."
TheRand study also renewed questions about whether the growing pile of lawsuits is benefiting the victims of asbestos. Despite the enormous economic costs, the authors conclude that asbestos litigation is failing to adequately compensate the most seriously ill victims and no longer poses a deterrent to the pursuit of profits at the expense of worker health.
After the costs of litigation, asbestos claimants now receive 43 cents of every dollar spent on asbestos compensation, a slight improvement over the 37 cents thatRand researchers said reached plaintiffs' pockets 20 years ago. At the same time, the most seriously ill victims--people with lung cancer and mesothelioma, an incurable asbestos-related cancer--get little more than a third of all payouts, the study said.
The study echoes others' concerns that a surge in claims in the last four years from people who may have been exposed to asbestos but are not sick is draining money away from cancer victims who have high medical expenses and are no longer able to earn a living.
"The system looks worse 20 years later," said Deborah Hensler, aStanfordUniversity law professor who contributed toRand's first asbestos litigation study in 1982 and to its latest. "The system [in 1982], however inefficiently, was performing its job of corrective justice. It was making the bad guys pay. And by making the bad guys pay, the system was sending a very strong message to other potential bad guys working with other products that 'If you engage in this kind of behavior, you might find yourself in bankruptcy.' "
Today, Hensler said, high legal costs and payouts to claimants without serious injuries are diverting money away from cancer victims, and corporateAmerica no longer believes that only the most culpable companies pay.
Because litigation has spread to hundreds of companies outside the asbestos mining and manufacturing business, Hensler said, executives of recently targeted companies are saying, " 'This is not fair. We are being asked to pay for something that other blame-worthy companies did.' "
Fred Baron, a pioneering asbestos lawyer fromTexas and a recent president of the Assn. of Trial Lawyers of America, disputed the idea that "uninvolved companies" are being unfairly swept into the fray.
"While these companies did not manufacture asbestos, they used, distributed or otherwise sold products to others knowing that their asbestos content was likely to injure downstream users," Baron said. "Other defendants purchased companies, often at a discount, knowing these companies had substantial asbestos liability."
Baron's comments came during the Judiciary Committee hearing.
But Steve Kazan, anOakland lawyer who represents only cancer victims, told the committee that unless Congress steps in, there will be no money left to compensate people who fall victim to asbestos cancers over the next 50 years.
An estimated 27 million workers were heavily exposed to asbestos between 1940 and 1973. But, because mesothelioma can take 40 years or more to appear, at least 2,500 new cases are diagnosed each year, and the disease is widely expected to claim hundreds of thousands of lives in 30 to 50 years.
To preserve funds for future mesothelioma victims,Kazan has taken the unusual position of joining corporations and insurers in proposing that Congress establish medical thresholds that would bar claims from people who are not functionally impaired. Other asbestos reform efforts have failed over the years, and, despite more than a year of lobbying, the latest idea has not found its way into a bill.
Baron, testifying on behalf of the trial lawyers association, urged the congressional committee to continue its restraint, saying the proposed reforms would harm the rights of most asbestos victims.
"Although they will argue that the only way to pay more to the sickest is by paying less to others, the defendants' real goal is to pay less total asbestos compensation," Baron said. "The concept that a victim must be impaired before their claim can be heard is an invention of the asbestos defendants designed to limit their liability."
Sen. Patrick J. Leahy (D-Vt.), who chairs the committee, said he was interested in coming up with a bill that would respond to the neediest victims, but he said the committee was unlikely to take it up before Congress adjourns for the year.
TheLos Angeles Times
Asbestos Bankruptcy Fund – Asbestos Related Deaths
L.A. Tops Nation In Asbestos-Linked Deaths
Mar 4, 2004 |Los Angeles Daily News
Los AngelesCounty has more asbestos-related deaths than anywhere else in the country, and the incidence of illness caused by the mineral is expected to rise over the next 20 years, a report released today says.
The report by the Environmental Working Group estimated that 1,227 county residents died of asbestos-related illness from 1979 to 2001, slightly more than the 1,051 inCookCounty, Illinois., which encompasses theChicago area. Nationwide, some 10,000 people died of asbestos-related disease in 2002.
Experts saidLos Angeles' large population, plus the widespread asbestos use in the shipping industry and post-World War II construction, help explain the county's high death figures.
"We were just floored when we looked at the deaths from this substance," said Richard Wiles, senior vice president of the Washington, D.C.-based environmental group. "We need to think of this as a 50-year problem because we still haven't banned asbestos.
Asbestos fibers can become embedded in the lungs and cause asbestosis essentially, scar tissue in the lungs or a usually fatal form of cancer called mesothelioma. Not all people exposed to asbestos become ill, but even small amounts can cause mesothelioma.
Until its dangers became well-known, asbestos was commonly used in construction and insulation materials and as a fire retardant. Its use peaked in the mid-1970s, when there were more than 3,000 asbestos-laced products on the market, though there were few safeguards for workers and their families exposed to asbestos dust.
Even today, asbestos is used in some cement pipes, vinyl floor tiles, duct insulation, floor backing and decorative plaster.
Cancer and other diseases linked to asbestos can remain dormant for 20 to 50 years, meaning people who worked with the fibers before safeguards were phased in during the 1970s could still develop potentially fatal illnesses.
U.S. Sen. Orrin Hatch, R-Utah, chairman of the Senate Judiciary Committee, has proposed the creation of a trust fund, financed byasbestos manufacturers and insurance companies, to handle lawsuits filed by asbestos victims and their families withoutbankrupting businesses.
Insurance companies anticipate $120 billion in asbestos claims worldwide and have pushed for national legislation to cut litigation, streamline the compensation process and set aside money to help people diagnosed with asbestos diseases.
"We know that 90 percent of current claimants have no signs of illnesses, but they are trying to get in before all these companies go bankrupt," said Peter Moraga, spokesman for the Insurance Information Network of California.
Already, some 70 companies have filed for bankruptcy protection.
Michelle Harrington has filed a $100,000 claim against W.R. Grace, whichdeclared bankruptcy in 2001, in part because of damages awarded in wrongful-death suits stemming from its mine inLibby,Mont., where some 200 townspeople died from asbestos-related diseases.
The owner of Harrington Tools is seeking to be reimbursed for having to clean up asbestos contamination in theWest San Fernando Road building she bought in 1992 a structure previously owned by a company that processed more than 100,000 tons of insulation, using asbestos from the Libby mine.
"Not being my responsibility or my fault, I was absolutely furious," Harrington said. "Private companies cannot be held responsible or accountable for something they never did."
California toxicologists are analyzing historical cancer and cause-of-death data in the neighborhood around theWest San Fernando Road plant as part of a national study of plants that processed the Libby material potentially discovering a new group of victims who might seek compensation.
Asbestos – Asbestos Bankruptcy Fund
OwensCorning Bankruptcy Plan Includes $5 Billion Asbestos Fund
Building products maker Owens Corning will pay more than $5 billion to asbestos claimants and as much as $2.27 billion to holders of bank debt as part of a plan to exitfederal bankruptcy protection.
The asbestos claimants, creditors and other parties agreed to the plan that would see Owens Corning emerge from more thanfive years of bankruptcy protection this fall, company lawyer Norman Pernick told abankruptcy court.
Essentially, the plan shifts the $7 billion in asbestos liabilities off the books of Owens Corning and into a trust that will be established for the plaintiffs.
Owens Corning will pay cash and shares worth more than $5.2 billion into the trust, making it one of the biggest asbestos settlements inU.S. history, said John D. Cooney, whoseChicago law firm, Cooney & Conway, represents the asbestos plaintiffs.
After the plan is approved, "we're asbestos-free,'' Pernick said.
The plan, which has an effective date of Oct. 30, would enablethe company to exit bankruptcy with a value of $5.86 billion, according to a settlement sheet obtained by The Associated Press. Existing equity would be wiped out and 131.4 million shares of new stock will be issued.
Shareholders would be given warrants allowing them to buy 5 percent of the company at $45.25 per share for seven years. Bondholders will get 26.6 million of the 131.4 million new shares and warrants to buy an additional 72.9 million shares at $30 per share.
The Toledo, Ohio-based company soughtChapter 11 bankruptcy protection in 2000in an effort to shield itself from claims for billions of dollars in damages linked to health-endangering asbestos products it made decades ago.
The plan, filed in December, follows years of litigation between attorneys for asbestos claimants, owners of the company's bank debt and others.
The U.S. Supreme Court recently declined to hear an appeal of another plan that would have lumped together the company's assets. Earlier reorganization proposals failed because of disputes between creditors.
Under the original version of the plan, shareholders would have gotten nothing.
Shareholders and some creditors had been hoping for legislation that would set up a national trust to take over asbestos liabilities from companies such as Owens Corning. But a bill that would have established the $140 billion victims' fund was defeated in the U.S. Senate in February, though supporters have vowed to revive it.
Asbestos is a commercial name for minerals that were commonly used in insulation, fireproofing and wallboard materials, and automotive brakes until the 1970s. Asbestos particles, when inhaled, can cause lung scarring, breathing problems, cancer or heart failure.
If approved by the court and creditors, the new plan could mean a windfall for hedge funds that own most of Owens Corning's bank debt.
Holders of about $1.5 billion in bank debt would be paid as much as $2.27 billion in cash, including interest.
Bankruptcy court Judge Judith K. Fitzgerald scheduled a hearing July 10 to review a disclosure statement that outlines the plan.
The proposal then would be sent to creditors for a vote before a confirmation hearing set for Sept. 18.
Owens Corning has agreed to pay $4.29 billion in cash into a trust for asbestos claimants, plus 28.6 million shares of equity in the reorganized company.
"Although nothing can ever repair the loss of lives that has occurred, today's settlement represents a fair resolution for both the victims and Owens Corning,'' Cooney said in a statement.
Anthony L. Gray, an attorney for the shareholders, said he and his clients were pleased with the deal.
"We think that it's a very good result for the holders of the preferred securities and the equity security holders,'' he said. "This was a major step forward for us.''
On the Net:
Owens Corning: http://www.owenscorning.com/
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