Kensington, Springfield, Angelo Gordon, CSFB seek examiner for Owens Corning case

By Jeff Pines

Washington, May 25 - Owens Corning Inc. creditors Kensington International Ltd, Springfield Associates, LLC, Angelo Gordon and pre-petition credit facility agent Credit Suisse First Boston want the U.S. Bankruptcy Court to appoint an examiner in Owens Corning's Chapter 11 case.

In a separate filing with the court, the group of creditors, as holders of more than $500 million of Owens Corning bank debt, asked the court to remove Francis McGovern, who was serving as a mediator and who was an advisor to Judge Alfred Wolin.

The Third U.S. Circuit Court of Appeals removed Judge Alfred Wolin from overseeing the asbestos-related Chapter 11 cases of Owens Corning, W.R. Grace & Co. and USG Corp.

The latest requests were made in Monday filings with the U.S. Bankruptcy Court for the District of Delaware.

The group of creditors want the examiner to investigate alleged irregularities highlighted by the Third Circuit court. Among those irregularities are an alleged breach of duties as a mediator by telling Judge Wolin "substantive positions of the mediating parties."

In addition, they want the examiner to look at allegations of irregular conduct in a meeting among Wolin, McGovern and other advisors at which McGovern allegedly opposed a reorganization plan that contained "critical elements" commercial creditors wanted but that "tort creditors strongly opposed."

This meeting was followed by the company submitting a brand new plan that was favorable to the tort creditors, the creditors group said.

The plan estimates $16 billion in asbestos claims, a figure, the creditors group call "grossly inflated."

Wolin held numerous ex parte, or outside of court discussions with only one side present, and they want the examiner to investigate to what extent tort interests' attorneys used these ex parte contacts to influence Owens Corning and the plan process.

The examiner should also recommend remedial action "to restore the integrity of the plan process in this case."

A June 21 hearing is scheduled on appointing an examiner.

A hearing on terminating McGovern's position as a mediator is scheduled for July 19.

Owens Corning's Chapter 11 case number is 00-03837.

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