Owens Corning received court approval on 23 June 2006 for a crucial aspect of its renewed drive to come out of bankruptcy: a Chapter 11 plan-support deal with major creditor groups.
US Bankruptcy Jud…
Owens Corning received court approval on 23 June 2006 for a crucial aspect of its renewed drive to come out of bankruptcy: a Chapter 11 plan-support deal with major creditor groups. US Bankruptcy Judge Judith Fitzgerald signed off on an agreement that commits Owens Corning and official representatives of bondholders, trade creditors, asbestos claimants and shareholders to support the company“s Chapter 11 proposal. Owens Corning attorney Norman Pernick said the approval came at a hearing in Pittsburgh. The global settlement ended the threat of continued litigation that could have clouded the future of Owens Corning for years to come. The Toledo, Ohio-based building materials maker has already spent nearly six years in Chapter 11 protection. The plan-support agreement was announced in court on the day Owens Corning was set to seek approval of the disclosure statement outlining the fifth version of its Chapter 11 exit strategy. The statement documented the essential terms of what will be its sixth, and, Owens Corning hopes, final Chapter 11 exit strategy. However, federal bankruptcy regulators worried that the plan-support agreement constituted an improper “lock-up” of votes in support of a Chapter 11 plan that, at the time, had yet to be filed. The Office of the US Trustee urged Fitzgerald not to endorse the plan support accord on the grounds that it contravenes bankruptcy prohibitions against premature solicitation of votes. However, the judge found that Owens Corning“s plan support agreement did not violate the ban on untimely vote solicitation, and approved it. She also indicated she would approve Owens Corning“s equity commitment agreement, which carries a USD 100 million fee for J.P. Morgan Securities Inc.