Owens Corning to pay more than $ 5.1 billion to asbestos victims

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New York, May 11: Owens Corning said on Wednesday, it would pay more than $5.1 billion to people sickened by asbestos, under a settlement that is part of its plan to emerge from bankruptcy protection after about six years.

The maker of fiberglass insulation said it would pay a total of $8.58 billion to creditors, including about $5.13 billion to asbestos victims. The asbestos payout would be about half what the claimants had sought.

Owens Corning, which filed for protection from creditors in October 2000, said it expects to emerge from Chapter 11 by the end of this year. Wednesday’s settlement appears to end years of wrangling with banks, bondholders and asbestos victims.

Shares of the Toledo, Ohio-based company surged 78% to close at $1.66 in over-the-counter bulletin board trading. John Cooney, a lawyer for the asbestos plaintiffs, said the settlement would pay people who have asbestos-related illnesses or are sickened within roughly the next 30 years.

Cooney had initially valued the asbestos settlement at $5.2 billion. “It is a resolved bankruptcy with all the creditor constituencies,” Cooney said. “A signed term sheet has been approved by the bank debt, the bond debt, Owens Corning and the asbestos claimants.”

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