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Owens Corning requests court approval of settlement agreement with Blue Ridge
By Jennifer Lanning Drey
Eugene, Ore., July 13 - Owens Corning requested court approval of an agreement that would allow Blue Ridge Investments LLC to hold a $25 million unsecured claim against Owens Corning, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.
Under the proposed settlement, Blue Ridge will be offered the right to subscribe to up to its pro rata share of 72.90 million shares of new common stock at $30 per share, according to the motion.
Owens Corning and Blue Ridge entered into an agreement in 1997 in which Blue Ridge purchased 2,000 shares of preferred stock of Faloc, Inc. for $40 million and 14 shares of common stock of Integrex for $100,000, according to the motion.
Under the terms of the share purchase agreement, Blue Ridge had the right, between December 1999 and December 2002, to require Owens Corning to repurchase all or a portion of the preferred and common shares, it said.
The put option also specified that, if exercised, Blue Ridge was required to give Owens Corning seven days notice.
Blue Ridge contends that it provided the required notice in September 2000 but Owens Corning disputes the contention, according to the motion.
The agreement also provided that the put option would be deemed exercised without notice if Owens Corning, Integrex or any other significant subsidiary filed voluntary bankruptcy.
Blue Ridge filed a proof of claim against Owens Corning for alleged breach of the put option in 2002.
A hearing has been scheduled for Aug. 21.
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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