USG Settles Asbestos Lawsuit

Article Added January 28th, 2006 - Print This Story - Bookmark This Story

USG Corp. announced Monday that they had reached an agreement for it’s asbestos related lawsuits, hoping that the move will help the company to emerge from bankruptcy later this year.

The world’s largest manufacturer of wallboard agreed to create and fund a trust for personal injury claims. The agreement calls for $900 million in cash and a contingent note for another $3.05 billion. If the legislation through Congress is passed for a national asbestos trust fund then the note will be cancelled. USG had filed Chapter 11 bankruptcy petitions in 2001.

The company promises to fully repay debt holders and suppliers with interest, making up a separate part of the agreement. The plan calls for financing from the companies cash on hand and a $1.8 billion rights offering to existing stockholders. This will be supported by Berkshire Hathaway Inc. tax refunds and a new long term debt. Both the bankruptcy court and the US District Court have to approve the terms of the deal and the overseeing of the case. The company had accrued fourth quarter losses, but realized net earnings of $165 million in the fourth quarter.

Article Added January 28th, 2006 - Print This Story - Bookmark This Story

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