Owens Corning to Pay Billions in Asbestos Claims

May 15, 2006 - Bloomberg News reports that insulation mega-giant, the Owens Corning Corporation, will pay a whopping $5.2 billion to resolve asbestos claims, allowing it to emerge from a state of bankruptcy.

Owens Corning is one of about 75 public companies in the United States that have sought bankruptcy protection in order to deal with asbestos suits.  Other companies include USG Corp., W.R. Grace & Co., Federal Mogul Corp. and Armstrong World Industries Inc., all who have set up Chapter 11 bankruptcy plans in order to wipe out their asbestos liabilities. 

In the agreement reached between Owens Corning and plaintiffs - all who’ve claimed they were sickened while employed at Owens Corning or while exposed to products manufactured by the company – includes a payment of $4.29 billion in cash into an asbestos victims' trust, plus 28.6 million shares in the company once it emerges from bankruptcy.

"The fact that this has settled and it's so big and so complex has sent a signal to everybody that settlements are going to happen more quickly," said Charles Tatelbaum, a lawyer with Adorno & Yoss in Ft. Lauderdale who has represented creditors in asbestos-related cases.

USG, who manufactures gypsum wallboard, made a similar settlement in January to the tune of nearly $4 billion.  It is expected that others may follow suit.

The Bloomberg article quoted John Cooney, of the Chicago law firm of Cooney and Conway.  The firm represented a number of plaintiffs in suits against the company. "The path to justice for victims of asbestos cancer and asbestos poisoning by Owens Corning has been a long and difficult one," he said.  "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."