Contact Us for a Free Consultation 1-800-790-8856

USG to settle asbestos-related lawsuits

 USG to settle asbestos-related lawsuitsUSG Corp., the world's largest manufacturer of wallboard, on Monday said it has agreed to settle asbestos-related lawsuits, a move expected to help it emerge from bankruptcy this summer. USG said it would create and fund a trust for personal injury claims with $900 million in cash and a contingent note for another $3.05 billion. However, if Congress passes legislation creating a national asbestos personal injury trust fund, then the contingent note would be canceled. USG shares surged as much as 25 percent after the announcement before pulling back some. Shares added $11.37, or 14.2 percent, to reach a 52-week high of $91.22 in midday trading on the New York Stock Exchange. The company said it will fully repay debt holders and trade suppliers with interest. Financing for the plan is expected to be provided from USG's cash on hand, a $1.8 billion rights offering to existing stockholders supported by Warren Buffett's Berkshire Hathaway Inc., tax refunds and new long-term debt. USG officials said the agreement would be included in a plan of reorganization and disclosure statement they expect to file with bankruptcy court next month. The documents will outline its plan to leave bankruptcy by July. During a conference call Monday, USG Chairman and CEO William Foote hailed the agreement as "finally closing the book on our involvement with asbestos personal injury litigation." Heavy costs associated with asbestos lawsuits forced the company into bankruptcy. "This agreement will allow us to keep our promises to provide compensation to those who have been injured, to repay our unsecured creditors in cash with interest, and to reward our shareholders," he said. The U.S. Senate next week is expected to take up the asbestos bill, which would establish a $140 billion trust fund with contributions from corporate defendants and their insurers to compensate victims of asbestos exposure. In exchange, courts would be forbidden from hearing new lawsuits from asbestos victims, sparing companies from large awards that could bankrupt them. USG also reported a fourth-quarter loss of $1.78 billion, or $39.94 per share, on sales of $1.34 billion. Results include an after-tax charge of $1.9 billion, or $43.39 per share, to settle the asbestos personal injury liability and emerge from bankruptcy. Excluding these charges, fourth-quarter 2005 net earnings were $165 million and earnings per share were $3.70.

The personal injury information offered by Pasadena, California personal injury Lawyer and contained herein, regarding Pasadena, California personal injury statutes and Pasadena, California personal injury claimants' rights, is general in scope. No Pasadena, California personal injury attorney / client relationship with our Pasadena, California personal injury attorneys is hereby formed nor is the information herein intended as formal legal advice. Please contact a Pasadena, California personal injury lawyer regarding your specific inquiry. See Terms of Use.

CONTACT US TODAY

The Law Offices of Robert Dourian is committed to answering your questions about personal injury law issues in California.

We offer a free consultation and we’ll gladly discuss your case with you at your convenience. Contact us today to schedule an appointment.

Menu