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USG mulls Chapter 11
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June 4, 2001: 11:00 a.m. ET
Maker of building materials ponders options to meet rising costs of asbestos litigation
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NEW YORK (CNNfn) - USG Corp., the maker of wallboard and other building materials, said Monday it was considering filing for Chapter 11 bankruptcy protection as a strategic option as it struggles to meet the escalating cost of asbestos litigation.
Chicago-based USG (USG: down $1.45 to $5.24, Research, Estimates), the world's leading producer of Sheetrock wallboards, said other alternatives being examined include a new secured bank financing that would provide it with greater long-term liquidity for restructuring.
When a company files for protection under Chapter 11, it is protected from creditors while it tries to reorganize its business and work out a plan to pay its debts.
"We continue to believe that appropriate legislation would provide the best solution to the asbestos problem. We are making progress on the legislative front, but the process is not moving as quickly as we hoped," USG Chairman, President and CEO William C. Foote said in a statement. "At the same time, settlement demands have increased dramatically, to the point that they are completely out of proportion to our legitimate liability."
Asbestos is a fibrous mineral once commonly used in insulation and fireproofing material. The inhaling of asbestos fibers can cause lung cancer and other deadly respiratory ailments, sometimes decades after the exposure. 
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