January 21st, 2005

The week long hearing relating to the asbestos liability of bankrupt firm, Owen Corning, concluded in Philadelphia earlier this week. The hearing commenced on January 13th and lasted for six days. Although the hearing is now over, no decision has yet been given.

The judge that heard the case had agreed to a deadline of February 7th to accept post hearing briefs. Another deadline has been set of February 18th for a response to these briefs by opposing parties. It is thought that Owen Corning faces over one hundred and eighty thousand claims already and could face well over half a million more in the future. This is because of the damage caused by asbestos insulation sold by the company from the 1950s to the 1970s.

The asbestos liability of Owen Corning is estimated at anywhere between $2.2 billion to $11 billion. However, this rises to around $18 billion with the added liabilities of the company’s Fibreboard subsidiary.

Because of the sum of the claims in comparison to the value of the company, it is thought that claimants will receive 38.5 cents to the dollar, which will be invested in trusts, stocks and shares, and will be used to pay the many asbestos related claims when Owen Corning emerges from chapter eleven bankruptcy. A final decision from the judge us expected in the next few weeks following the post hearing briefs and any responses.