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Owens Corning Seeking Chapter 11 Protection

Bankruptcy: Plan to reorganize would help building materials maker resolve asbestos liabilities while continuing to operate.

October 06, 2000|From Associated Press

TOLEDO, Ohio — Owens Corning, the largest U.S. building materials maker, filed for bankruptcy protection Thursday to help it cope with asbestos-related lawsuits that could eventually cost the company $7 billion.

The supplier of building and industrial materials estimated Thursday it has paid or is committed to paying $5 billion so far. It said it faces about $2 billion more in asbestos claims even though it stopped selling asbestos products more than 25 years ago.

The voluntary Chapter 11 filing in Wilmington, Del., will allow the company to develop a plan of reorganization that would resolve its asbestos liabilities while allowing it to continue operating its businesses, the company said in a news release.

Asbestos, which can cause health problems when inhaled, is a white flaky substance widely used during the 1940s and 1950s for insulation and in shipbuilding and in power plants. It has been known to cause lung cancer and asbestosis, a lung-scarring disease.

The 62-year-old company, probably most familiar for its Pink Panther mascot, has made payouts to 440,000 people who said asbestos made them ill.

Glen H. Hiner, chairman and chief executive, said the company had made progress toward settling asbestos claims through a national settlement program and thought a bankruptcy protection filing could be avoided.

However, the cost of resolving claims, combined with new legal filings, "led us to the conclusion that a Chapter 11 reorganization was prudent and necessary," he said.

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