Owens Corning $7 billion asbestos liability decision appealed

By Caroline Salls

Pittsburgh, May 16 - Owens Corning's pre-bankruptcy bank lenders and a group of bondholders appealed the U.S. Bankruptcy Court for the District of Delaware's decision to fix Owens Corning's liability for asbestos claims at $7 billion, according to a Friday filing.

The appeals come from pre-bankruptcy bank agent Credit Suisse First Boston and bondholders King Street Capital Management, LLC, D.E. Shaw Laminar Portfolios, LLC, Harbert Distressed Master Fund, Ltd., Canyon Capital Advisors, LLC and Lehman Brothers, Inc.

The appeal was filed with the U.S. Court of Appeals for the Third Judicial Circuit.

On April 13, Judge John Fullam rejected a request from Credit Suisse First Boston that the figure be cut to an estimate of $4.8 billion because it included estimates for punitive damages.

In the denial, the judge said he considered more than the doctors' testimony on the matter and that he "attempted to arrive at an estimate which appropriately reflected the differences between what has already occurred and what is likely to happen in the future."

Included in the total is pending claims, future claims and contract claims.

CSFB said that, although the judge ruled that punitive damages should not be included in the estimate, he relied upon estimates from doctors that included punitive damages and he "did not make any adjustments to account for alleged overpayments to unimpaired clients."

The Toledo, Ohio-based building materials company had previously estimated its asbestos claims to be $16 billion.

But CSFB and other holders of the loans had said the value of claims is "significantly lower."

The $7 billion figure determined by the court is an estimate of the contingent and unliquidated claims against the company for personal injury or death caused by exposure to asbestos.

Included in the total is pending claims, future claims and contract claims.

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

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