USG asbestos representative, committee object to exclusivity extension request

By Caroline Salls

Pittsburgh, July 18 - USG Corp.'s request to extend its exclusive periods to file a plan of reorganization and solicit votes on the plan drew a joint objection from the futures representative and official committee of asbestos personal injury claimants, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

According to the objection, USG said the extension is necessary because the declaratory relief action and estimation of its asbestos liability will consume "at least the next several months."

The representative and the committee said resolving these issues is not critical to the ability to propose a plan, and a plan could be proposed taking into account the possible outcome of asbestos litigation.

"It is senseless to hold up the plan process and allow these cases to remain in limbo until [these] complex litigations are fully completed," the objection said.

The representative and committee suggested USG file a plan that will provide for distribution of a combination of the company's available cash, notes and stock in the reorganized company to be issued to the trust established to compensate asbestos personal injury claimants, asbestos property damage claimants and all other general unsecured claimants.

The plan distribution would be based on the district court's estimation of the company's asbestos personal injury liability and of which debtors are liable, according to the objection.

Under the objectors' plan, any remaining cash, notes and new stock would be distributed to equity holders.

A hearing on the exclusivity extension, which would extend USG's period to file a plan to Dec. 31 from June 30 and to solicit votes to March 1, 2006 from Aug. 31, is scheduled for Aug. 29.

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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