USG, debtor agree to $1.7 million coverage settlement with Federal Insurance

By Caroline Salls

Pittsburgh, June 5 - USG Corp. requested court approval of a settlement agreement with Beadex Manufacturing LLC and Federal Insurance Co. that would make Federal a "settling insurer" under USG's plan of reorganization, according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

Beadex Manufacturing is a predecessor to USG debtor Beadex, LLC. Sea Insurance Co., now Federal Insurance, provided $1.7 million in insurance policies to Beadex Manufacturing.

The settlement releases and terminates all rights, obligations and liabilities the parties may owe to each other under the subject policies.

Under the settlement, Federal will pay $1.72 million to the plan's asbestos personal injury trust.

If there are any objections to the settlement, a hearing will be held on June 15.

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

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