Owens Corning trade claimants object to disclosure statement, cite differing unsecured creditor treatments

By Caroline Salls

Pittsburgh, June 26 - Owens Corning's ad hoc committee of trade claim holders objected to approval of the disclosure statement for the company's sixth amended plan of reorganization, saying the plan does not treat different classes of unsecured creditors equally, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

According to the objection, bondholders will receive undervalued new common stock under the plan, while trade creditors will receive cash.

The trade claimants said the market has shown that the actual value of the deeply discounted new common stock is substantially greater than the value of the cash distributions.

In addition, the trade creditors said the plan fails to pay post-bankruptcy interest to holders of general unsecured claims against subsidiary debtors, as required by law.

The trade claimants also contended that the disclosure statement "fails to include even the most fundamental financial information," including operating performances and financial projections for individual debtors.

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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