USG equity committee suggests alternate interim distribution plan

By Caroline Salls

Pittsburgh, May 16 - USG Corp.'s statutory committee of equity security holders filed a response Friday to the official committee of unsecured creditors' motion for limited interest payments on unsecured pre-bankruptcy claims, saying the court should authorize its modified proposal instead.

The creditors' committee wants the court to direct USG to make interest payments on liquidated, undisputed bank and bond debt and trade and other non-asbestos claims due from Jan. 1.

According to the response filed with the U.S. Bankruptcy Court for the District of Delaware, the equity committee said it supports interim distributions to holders of liquidated undisputed claims, as long as they are not identified as payments of interest or principal.

Instead, the equity committee says the court should authorize interim distributions in some "middle-ground" percentage of their claims and defer a claimant's rights to interest until the plan of reorganization is confirmed.

"[USG] may benefit from the cash savings resulting from making interim distributions, and all parties in interest will preserve their rights and benefit from the increased value of [USG's] estates," the filing said.

The creditors committee said USG's estates will "reap a significant benefit by saving approximately $5 million in annual interest costs."

USG, a Chicago-based building materials company, filed for bankruptcy on June 25, 2001. Its Chapter 11 case number is 01-02094.

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