Pittsburgh Corning Exit-Plan Approval Opposed by InsurersSteven Church
Insurers fighting Pittsburgh Corning Corp.’s reorganization asked a judge to rescind her initial approval of the building-supply company’s plan to exit bankruptcy.
U.S. Bankruptcy Judge Judith Fitzgerald in Pittsburgh erred May 16 when she tentatively approved a plan to create a trust to pay victims of asbestos poisoning, insurers led by Mt. McKinley Insurance Co. said in court documents filed today. The insurers said they should have been given the chance to collect information about the plan before Fitzgerald approved it.
The plan would allow Pittsburgh Corning’s parents, Corning Inc. and PPG Industries Inc., to 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 claims would unfairly alter the policies.
The plan also allows PPG and Corning to “game coverage litigation” between themselves and their insurers, according to today’s filings.
Fitzgerald has scheduled a court hearing for May 23 to hear final objections to the reorganization plan. The trust and the plan won’t become final until approved by Fitzgerald and a U.S. District Court judge.
The case is In Re Pittsburgh Corning Corp., 00-22876, U.S. Bankruptcy Court, Western District of Pennsylvania (Pittsburgh).