Largest US Asbestos Manufacturer Seeks Bankruptcy

January 2 , 2006

The biggest US manufacturer of asbestos, Owens Corning, announced that they are filing a new bankruptcy reorganization plan in order to attempt to settle the more than $10 billion in asbestos related lawsuit liabilities they are facing.

Under the new plan that was filed in US Bankruptcy Court in Wilmington, Delaware, the company would offer plaintiffs cash and stock options in their new company in lieu of undergoing a costly trial. Owens Corning also sought bankruptcy protections in 2000 following several asbestos lawsuits.

Companies around the country are watching the plan, as it may be a solution for the more than 70 businesses that are all facing serious monetary losses due to the asbestos litigation that is expected to increase over the next ten years.

Several Senators, meanwhile, are pushing for the creation of an asbestos fund that would pay out settlements to claimants around the country. Companies would contribute to the fund, though any additional monetary damages may have to be taken out of taxpayers' pockets, according to critics.

The balance that is needed is one where victims of asbestos exposure can get full compensation and companies can still maintain their businesses, but no clear solution seems to be in sight.

Asbestos, a material used until the 1970s in fireproofing, building materials, ship and car making, and several other commonly used items, was found to be linked to the development of a rare and deadly cancer known as mesothelioma, among several other health problems. Asbestos manufacturers have been shouldering much of the blame and are targeted for a number of reasons, including using asbestos even after they knew it was harmful.

Owens Corning plans to pay out the claimants against it now and may emerge again from bankruptcy but will most likely have to face several additional suits in the future. Mesothelioma takes a long time to develop, sometimes as long as thirty years, and is very difficult to diagnose.

Creditors would still have to back Owens Corning's bankruptcy plan in order for it to go through.

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