Owens Corning has secured a judgement temporarily limiting large trades in the company“s stock. Supervising Judge Judith Fitzgerald agreed to the trading restrictions on 28 February 2005, although in…
Owens Corning has secured a judgement temporarily limiting large trades in the company“s stock. Supervising Judge Judith Fitzgerald agreed to the trading restrictions on 28 February 2005, although in a separate matter concerning X-ray readers, she decided in favor of bank creditors. The building materials maker had sought the trading restrictions because of concerns that too large a shift in ownership could cost it tax benefits. The restrictions apply only to large stakeholders with more than 4.75% of the firm“s common stock, or to trades that would create stakeholders with 4.75% or more. Owens Corning and other asbestos bankruptcy companies have seen renewed interest in their shares in the last few months on hopes of a legislative solution to the burden of asbestos damages claims. However, the trading complicates the matter for companies trying to emerge from bankruptcy, because if too many shares change hands, the Internal Revenue Service can refuse to recognize net operating loss carryforwards. In Owens Corning“s case, the tax advantages at risk are significant, the company said in court papers. A final hearing on the proposed trading limits was scheduled for 25 April 2005. In a separate matter on 28 February 2005, Fitzgerald said Owens Corning“s banks could sue some medical professionals involved in interpreting X-rays taken in connection with asbestos claims. The company had opposed the bid to sue brought by Credit Suisse First Boston as agent for the bank group. While Owens Corning had concerns about some of the X-ray readers, the company said, it worried that the proposed litigation would backfire, prompting counterclaims from people sued that would cost the bankrupt company more than they would recoup. Fitzgerald said she would allow the suits to proceed after getting assurances from an attorney for the banks that it would fund the proposed litigation and indemnify Owens Corning against any countersuits.