Judge Judith Fitzgerald, a federal bankruptcy judge, indicated from the bench that she approved of Owens Corning’s plan for emerging from bankruptcy. The plan has an effective date of Oct. 30, 2006. The reorganization plan, filed in December, 2005, follows more than five years of litigation between attorneys for asbestos claimants, owners of the company’s bank debt and others.
The plan shifts Owens Corning’s $7 billion in asbestos liabilities off the company books and into a trust that will be established for the plaintiffs. As part of the plan, the Toledo, Ohio-based building-products company will pay more than $5 billion to asbestos claimants, including mesothelioma victims, and as much as $2.27 billion to holders of bank debt. Existing equity would be wiped out and millions of new stock shares will be issued.