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Published on 5/27/2004 in the Prospect News Distressed Debt Daily.

Owens Corning case to be overseen by judge John Fullam

New York, May 27 - Owens Corning Inc.'s Chapter 11 case will be overseen by judge John Fullam of the U.S. District Court for the Eastern District of Pennsylvania, following the removal of judge Alfred Wolin from the case earlier this month.

Fullam was appointed to the role in an order from Anthony Scirica, chief judge for the U.S. Court of Appeals for the Third Circuit, filed with the U.S. Bankruptcy Court for the District of Delaware on Thursday.

Wolin was removed from the asbestos-related Chapter 11 cases of Owens Corning, W.R. Grace & Co. and USG Corp.

In its opinion, the appeals court stated that "a reasonable person, knowing all of the relevant circumstances, would conclude that Judge Wolin's impartiality might reasonably be questioned in the Owens Corning, W.R. Grace & Co. and USG Corp. bankruptcies."

The court's decision said: "We emphasize that our review of the record has not revealed the slightest hint of any actual bias or partisanship by Judge Wolin."

But the litmus test is the perception of bias, not actual bias, the court said.

Kensington International Ltd. and Springfield Associates LLC, as agents for Owens Corning's pre-petition bank lenders, had petitioned Wolin to recuse himself, arguing his advisers had conflicts of interest. D.K. Acquisition Partners LP, Fernwood Associates LP and Deutsche Bank Trust Co. Americas petitioned him to recuse himself in the Grace case, and USG petitioned him in its own case. He refused.

They then petitioned the court of appeals to remove him.

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

Wolin was originally assigned to judge five asbestos-related Chapter 11 cases. Armstrong World Industries Inc. and Federal-Mogul Inc. are the other two cases.

He will continue to oversee the Federal-Mogul case, and a separate hearing will be held to determine whether he will continue judging the Armstrong case.


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