USG's personal injury claimants committee objects to extensions

By Jeff Pines

Washington, March 22 - USG Corp.'s asbestos personal injury claimants committee and the court-appointed representative for future claimants objected to the company getting an extension on its exclusivity periods.

The company is seeking its sixth extension but the committee and representative said that over the 2½ years that the company has been in Chapter 11 they have not had "single substantive discussion" about a reorganization plan. In their view, the company is not making any progress toward a reorganization plan that could be approved, they said in a March 19 filing with the bankruptcy court for Delaware.

Bankruptcy law holds that the more extensions a company gets, the more proof it needs that further extensions are needed, the committee and representative said, and they think that ending USG's exclusivity to file a plan and solicit acceptances may hasten the plan process.

They noted that in Babcock & Wilcox's Chapter 11, negotiations in earnest started within months of the company losing its exclusivity.

In addition, USG cannot cite the size and complexity of its case as a justification because otherwise any debtor in a complex case would be entitled to endless extensions and they said there are "other parties willing and able to file a plan of reorganization," though they do not name them.

USG, a Chicago-based sheetrock maker, filed for Chapter 11 on July 25, 2001 due to asbestos litigation claims.

A hearing is scheduled for April 26.

Its Chapter 11 case number is 01-2094.

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