USG trade, personal injury claimants, asbestos property damage committee object to disclosure statement

By Caroline Salls

Pittsburgh, March 21 - USG Corp.'s disclosure statement for its plan of reorganization drew multiple objections Monday, according to filings with the U.S. Bankruptcy Court for the District of Delaware.

The objections were filed by USG's ad hoc trade claims committee, several personal injury claimants and the official committee of asbestos property damage claimants.

The trade claims committee said it "vigorously objects to the plan terms that call for post-petition interest on trade claims to be paid at the legally deficient, low federal judgment rate."

The trade claimants said the low 3.59% interest rate is part of an "unsupportable scheme" to pay a higher rate of interest to structurally subordinate creditors.

The personal injury claimants, including Juan Jose Palomo, Ian A. Palomo, Bryan J. Palomo, Debra Clennon, Joseph A. Clennon, Brenda R. Abercrombie and Kenneth A. Abercrombie, said the statement fails to identify on what basis the company will determine which claims will remain in the bankruptcy court and whether USG will specifically permit personal injury state court jury proceedings to proceed in the state court actions.

The asbestos property damage committee said the plan improperly classifies asbestos personal injury claims as unimpaired, denying claimants the right to vote on the plan.

The committee said the statement does not explain why the company has classified these claims as unimpaired.

A hearing on approval of the disclosure statement is scheduled for April 3.

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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