Owens Corning lenders gets final approval to deem bank claims unimpaired under plan

By Caroline Salls

Pittsburgh, May 10 - Owens Corning's pre-bankruptcy institutional lender agent Credit Suisse obtained final approval from the U.S. Bankruptcy Court for the District of Delaware Wednesday to deem the bank holder classes under the company's plan of reorganization as unimpaired in order to take advantage of claim treatments negotiated in a settlement.

According to the motion, the company and the steering committee for the bank claimants reached an agreement on claim treatment that provides the company with its first realistic possibility for emergence from Chapter 11 bankruptcy.

However, Credit Suisse said the agreement does not mean the steering committee can support the plan because the plan calls for a "death trap" for the bank holders, under which they will only receive the negotiated treatment if they are deemed unimpaired and vote in favor of the plan.

If the bank holders are impaired and don't vote to accept the plan, their claims will be determined via further litigation, and they will be paid in an undisclosed mixture of cash and notes.

Credit Suisse said the value and appropriateness of any non-cash plan consideration would likely be subject to even more litigation.

Credit Suisse said all the "unnecessary and wasteful" litigation could be avoided if the bank holders' claims are deemed unimpaired.

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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