Large Owens Corning shareholders have stepped up their efforts to force the building materials manufacturer to hold an annual meeting of shareholders, its first in more than five years.
Catalyst Inve…
Large Owens Corning shareholders have stepped up their efforts to force the building materials manufacturer to hold an annual meeting of shareholders, its first in more than five years. Catalyst Investment Management Co., Deutsche Bank Securities Inc., Hain Capital Group, Harbinger Capital Partners Master Fund Ltd., Plainfield Asset Management LLC and Tudor Investment Corp. have asked a federal court to force a bankruptcy judge to decide whether they can sue in state court to get Owens Corning to call an annual meeting. The tactic is aimed at enabling shareholders at the annual meeting to vote in directors willing to hold Owens Corning in bankruptcy until Congress enacts legislation to create a national asbestos trust that would take billions in debt off the company“s balance sheet. This latest move follows the recent refusal by Judge Judith K. Fitzgerald of the US Bankruptcy Court in Wilmington, Delaware to appoint an official panel to represent the interests of current shareholders in Owens Corning“s Chapter 11 case. The current Chapter 11 proposal, which the company hopes to see confirmed in 2006, would divide equity in the operationally sound business to creditors and leave nothing for current shareholders. Hopes of a federal solution to the firm“s asbestos liabilities through the creation of a national asbestos trust, however, have breathed new life into the market for Owens Corning“s shares. However, these hopes suffered a blow when the US Senate voted on 14 February 2006 to block legislation that would create a USD 140 billion compensation fund for asbestos victims. An informal panel of large shareholders on 28 February 2006 asked a federal court to order US Bankruptcy Judge Judith Fitzgerald to rule on whether a ban on lawsuits against the company while it is in Chapter 11 will block a legal move to compel Owens Corning to hold an annual meeting. At a 21 February 2006 hearing, Fitzgerald denied a shareholder motion asking for permission to file a planned lawsuit in Delaware“s Court of Chancery. Without a “yes” or “no” from the bankruptcy judge on whether the state court action would violate the Bankruptcy Code, Owens Corning“s shareholders say they have no way to proceed.