Owens Corning Agrees To Massive $5.2 Billion Asbestos Settlement

Owens Corning, the global #1 maker of insulation products, has agreed to an asbestos settlement that is probably the biggest ever. The $5.2 billion deal will protect the company from any and all future legal action related to human illnesses caused by exposure to asbestos, and will allow Owens Corning to emerge from bankruptcy.

Further details can be found below in the snippet from today's press release:

"In what is likely the largest asbestos settlement in history, principles announced today a $5.2 billion dollar agreement to resolve current and future asbestos claims with Owens Corning and permit the world's largest producer of insulation products to emerge from bankruptcy with no further obligations for asbestos liability.

Terms of the agreement will require Owens Corning to make an initial cash payment of approximately $2.9 billion dollars in cash into a trust for asbestos victims. Owens Corning will make further payments to the asbestos victims' trust within ten days of the end of this year's Congressional session in the amount of $1.39 billion dollars. The company will also deliver to the trust 28.6 million shares of equity in the reorganized company. The value of these payments and equity totals in excess of $5.2 billion dollars. 'The path to justice for victims of asbestos cancer and asbestos poisoning by Owens Corning has been a long and difficult one. 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,' said John D. Cooney, of the Chicago law firm of Cooney & Conway. 'Although we are pleased with the outcome of this settlement, it is an appropriate time to remember that countless lives were lost or destroyed as a result of the needless use of asbestos containing products.'

Cooney is the chairman of the official Asbestos Claimants Committee formed by the United States Trustee to represent asbestos plaintiffs after Owens Corning filed for bankruptcy protection in October of 2000. The settlement of this case will resolve all of the asbestos liability of the various divisions of Owens Corning as well as their wholly owned subsidiary, the Fiberboard Corporation.

'Thousands of American men and women exposed to Owens Corning asbestos products have developed mesothelioma (an often fatal asbestos cancer) and other forms of cancer and asbestos disease. Settlement monies paid into this trust will make certain that those victims will always have a place to go to recover for the damage that has been done to them and their families,' said Cooney. 'Unfortunately, people continue to be diagnosed with mesothelioma every week and people are still becoming sick from asbestos exposure. I am hopeful that the monies realized from this settlement will help the victims face a very difficult future,' Cooney added.

'Under the terms of this settlement, Owens Corning will meet their obligations to the people who are injured and dying and also enable the company to reorganize and retain all of their employee workforce and businesses,' said Cooney. 'The terms of this settlement will provide for payment to the pre-petitioned holders of bank debt and bond debt incurred by Owens Corning. Under the terms of the agreement, the bond holders may choose to exercise an option to purchase for cash, certain equity from the trust in exchange for cash payments.'

The terms of the deal could be altered in the event that federal legislation were to be passed by the United States Congress this year. In such an event, the obligations for the payment of the Owens Corning liability of over $5.2 billion dollars would shift from Owens Corning to taxpayers or other companies.

'Now that Owens Corning has acknowledged their liability of over $5 billion dollars and agreed to make payments to those that have been killed and injured, I would hope that our elected representatives would not seek to bail out anyone from that obligation,' said Cooney. 'These families have suffered enough and waited enough and it would be a tragedy to reverse their settlements after all this effort from so many parties,' added Cooney.

John D. Cooney is also the chairman of the USG Asbestos Claimants Committee which announced a similar $4 billion dollar settlement of asbestos liability in February."

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