USG's futures representative objects to exclusivity extension

By Jeff Pines

Washington, Nov. 15 - USG Corp.'s futures representative, Dean Trafelet, and the official committee of asbestos personal injury claimants think the company has plenty of time to file a reorganization plan and another extension would be a waste of time.

They filed their objection with the U.S. Bankruptcy Court for the District of Delaware Friday.

Negotiations have reached an impasse and mediation has not produced any results, they said.

USG's exclusive right to file a reorganization plan ends Dec. 1 and its exclusive right to solicit votes for the plan ends on Feb. 1.

Trafelet and the committee said they are ready to propose a plan that has the support of 75% of the asbestos personal injury claimants and pay USG's creditors in cash in full with post-petition interest.

Last week, USG sued Trafelet and the committee in a case in which USG asked the court to rule on whether only its United States Gypsum Co. could be held liable for asbestos claims, insulating USG and its other subsidiaries from any financial liability. If USG succeeds in its lawsuit, it will avoid the substantive consolidation of its assets, which would otherwise be available to pay claims.

A Dec. 20 hearing is scheduled, which means the company will get a bridge extension on its exclusivity to carry it to the hearing.

USG filed for bankruptcy on June 25, 2001. Its Chapter 11 case number is 01-2094.

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