USG to Pay Asbestos Liability Claims

June 16, 2006 - The USG Corporation, at one time the top-producer of gypsum wallboard in the United States, has received court approval for a plan that will require the company to pay $3.95 billion to resolve thousands of asbestos liability claims.  The plan will also allow USG to emerge from bankruptcy.

The New York Times reports that the settlement of approximately 250,000 asbestos-related claims “will be financed in part by the sale of $1.8 billion in shares, guaranteed by the company controlled by the billionaire investor Warren E. Buffett.”

Based in Chicago, USG declared bankruptcy more than 5 years ago, joining the other 80 or so U.S. companies that have been forced into bankruptcy due to asbestos-related lawsuits.  At the time of the bankruptcy in 2001, the company listed about $2.7 billion in debts. 

There was no opposition to the reorganization plan, noted USG attorney David Heiman.  Brad Erens, another lawyer for USG, reported that the company might emerge from court protection in as little as two weeks.

The Times also noted that USG plans to pay unsecured creditors in full with about $1.4 billion.

From 1930 to 1972, many of USG’s products contained asbestos, including its wall products and joint compounds.  The products were used by hundreds of thousands of contractors and others involved in the building industry. The inhalation of asbestos fibers is known to cause diseases such as asbestosis or mesothelioma, and many companies in the U.S. knew about the dangers of the material yet continued to include it in their products.