January 31 , 2006

Chicago based company USG Corp. has come to an agreement regarding settlements for their asbestos related lawsuits. The largest manufacturer of wallboard in the world filed for bankruptcy in 2001, which has proved to be a substantial business move for the company, significantly increasing sales, stock prices, and profits for USG.

USG has proposed a $900 million fund in cash to compensate those with asbestos injury claims against the company as well as a contingent note for an additional for an additional $3.05 billion. The $3.05 billion contingent note is barring the creation of the federal asbestos fund. If Congress passes legislation to create the federal injury fund, the contingent note will be void.

The USG bill in cohort with the McDermott International Inc.'s plan, announced earlier this January, has unveiled the corporate motives for the federal asbestos fund. The fund, which proposes a $140 billion compensation fund to alleviate injury and suffering of asbestos victims, will fall severely short in funding of the amount that would be awarded if the claims were dealt with by the companies, independently.

For instance, the $3.05 billion contingent note that will be enacted by USG will be canceled in the event of the federal fund, reducing the company's liability payments to 23 cents on the dollar of what the damages would have been. McDermott International Inc. similarly has proposed an initial $350 million trust fund with a contingent $600 million if the federal fund does not pass. If the federal asbestos fund is created however, McDermott will only pay an additional $25 million to compensate asbestos victims.

"The USG plan makes plain that the federal trust fund is a corporate bailout in sheep's clothing," commented Joan Claybrook of Public Citizen. "Under the guise of compensating victims for terrible diseases, like asbestosis and mesothelioma, corporate America's real aim is to run away from billions in liability for knowingly exposing workers to a lethal toxin."

Federal fund supporters argue that the bankruptcy of many companies facing large asbestos injury claims displays the obvious need for the federal fund. While the companies prosper financially and in the stock market from their own bankruptcy, the economy is losing billions of dollars and thousands of jobs, argue the sponsors.

These allegations regarding the company's financial status are not far from the truth. USG's sales have grown an estimated 56 percent since 2001 when they filed for bankruptcy and their stock prices have risen over 2,400 percent, raising the companies stock value by approximately $800 million.

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