Owens Corning granted court OK of transfer limitation agreement after improper stock sale notice

By Caroline Salls

Pittsburgh, Feb. 15 - Owens Corning obtained court approval of a stipulation that limits transfers of its equity securities for tax advantages after one equityholder did not properly notify the company of a stock sale, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

The stipulation is between Owens Corning, Harbert Distressed Investment Master Fund Ltd. Harbert Fund Advisors Inc. and Alpha US Sub Fund VI LLC.

In March, Owens Corning obtained approval to limit the transfer of equity securities by substantial equityholders, but Harbert Distressed failed to notify the company, as required by the notice procedures, that it sold 69,060 shares of stock to Alpha.

Owens Corning said all parties have agreed that Harbert Distressed's sale of the improperly traded shares are null and void for failure to comply with the notice procedures and that the sale, accordingly, must be "unwound."

Harbert said that, following the unwinding of the sale, it plans to sell 69,060 shares to Alpha at market value as of the stipulation's execution date in a new transaction, and Owens Corning said it does not object to the new sale.

According to the motion, the transfer limitations preserve valuable income tax attributes, including net operating loss carryforwards and unrealized built-in deductions and losses with significant value to the bankruptcy estates.

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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