Owens Corning says two key issues remain to be resolved

By Jeff Pines

Washington, June 10 - Owens Corning Corp. said it has much in agreement with its bank debt holders - the only constituency still objecting to its reorganization plan - except for two issues.

In a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware, the Toledo, Ohio-based building materials company said it and the bank lenders agree that two key issues remain unresolved: substantive consolidation and asbestos claim valuation.

In its own filing on Tuesday, Credit Suisse First Boston as agent for the pre-Chapter 11 bank lenders also cited these two issues as outstanding problems.

The bank debt holders, unlike the company's other creditors, have guaranties from the company's subsidiaries. If these are enforceable, they would get a better recovery than the other creditors.

After two years of research, Owens Corning concluded that its subsidiaries were really one business and that they should all be consolidated with the company as one entity.

But the bank debt holders believe the contrary, which means they would get a larger recovery.

The bank debt holders want an asbestos claims bar date so the company can get a sense as to how many claims there actually are.

Owens Corning, on the contrary, is relying on its database of asbestos claims, suits and settlements over decades. The company believes a claims bar date should be considered but is not essential to estimate the amount of asbestos claims or confirming the plan.

Owens Corning filed for bankruptcy on Oct. 5, 2000. Its Chapter 11 case number is 00-03837.

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