Pittsburgh Corning Judge Approves Plan, Rejects Insurers
Stock Chart for Corning Inc (GLW)
Pittsburgh Corning Corp.’s bankruptcy judge overruled final objections by insurance companies trying to halt the reorganization of the building-supply company.
U.S. Bankruptcy Judge Judith Fitzgerald in Pittsburgh refused yesterday to reconsider her initial approval of the reorganization plan, which relies partly on insurance proceeds to pay victims of asbestos exposure.
Last week, insurers led by Mt. McKinley Insurance Co., asked Fitzgerald to reconsider her decision, claiming she erred May 16 when she tentatively approved a plan to create a $3.5 billion asbestos trust.
The trust and the plan now go before a U.S. district court judge for a second approval, which is required for all asbestos-related bankruptcy cases that create a victim’s trust fund.
Under the bankruptcy plan, Pittsburgh Corning’s parents, Corning Inc. (GLW) and PPG Industries Inc. (PPG), may shift their liability for asbestos claims to the trust, which the companies and the insurers would fund. Corning and PPG would give the trust the right to collect on their insurance policies under the plan, which Mt. McKinley claimed would unfairly alter the policies.
During a court hearing May 23, Fitzgerald gave the insurers a final chance to talk her out of her decision. At the end of the hearing, she said she was unlikely to change her mind and asked the parties to submit any minor wording changes to her proposed order before she made a final ruling.
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