Owens Corning receives court approval to restrict transfer of equity securities

By Ellen Chang

Houston, March 1 - Owens Corning received interim and final orders Tuesday from the U.S. Bankruptcy Court for the District of Delaware allowing the restriction of the transfer of its equity securities so that it would not lose tax advantages.

The court said that any person or entity who now owns or in the future owns 4.75% of the outstanding equity securities of Owens Corning must file their status with the court by March 21.

The court also said that it must be notified before the sale of any Owens Corning equity securities by a substantial equity holder.

Owens had sought the restriction because it said two entities have already purchased significant equity positions in the company.

Harbert Distressed Investment Master Fund Ltd. purchased 5.5 million shares of common stock - about 10% of the shares outstanding - and Lehman Brothers Holdings Inc. acquired 3.9 million shares of common stock - 7% of the shares outstanding. The combination of the 17% interest is treated as contributing towards an ownership change of Owens.

Owens said the company could lose "significant potential tax savings" if an "ownership change" occurs and would impact a "successful restructuring."

As of Dec. 31, Owens Corning had $130 million of net operating loss carry-forwards and more than $1 billion of unrealized built in deductions. It intends to realize these tax savings when it exits from Chapter 11.

Owens Corning, a Toledo, Ohio, building materials company, filed for bankruptcy on Oct. 5, 2000. Its Chapter 11 case number is 00-3837.

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