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News > Companies
USG files for Chapter 11
June 25, 2001: 1:45 p.m. ET

USG files for bankruptcy protection due to growing asbestos costs
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NEW YORK (CNNfn) - Building products manufacturer USG Corp. filed for federal bankruptcy protection Monday, due to mounting costs of asbestos litigation, becoming the latest in a string of companies who have filed for protection under Chapter 11 due to asbestos litigation.

USG (USG: up $0.01 to $3.89, Research, Estimates), a Chicago-based company, as well as its major domestic subsidiaries U.S. Gypsum, USG Interiors, Inc., and L&W Supply Corp., filed for bankruptcy under Chapter 11. When a company files for Chapter 11, it is protected from creditors as it seeks to reorganize and work out a plan to pay its debts.

Other companies to file for protection under Chapter 11 recently are specialty chemical maker W.R. Grace & Co., and fiberglass and composite materials maker Owens Corning.

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William C. Foote, chairman, president, and CEO, noted that the recent bankruptcies of other asbestos defendants have significantly increased USG's asbestos costs.

"We have said repeatedly that U.S. Gypsum can afford to pay for its own liability, but it cannot pay for the liability of other companies or pay everyone who was exposed to asbestos-containing products yet that is exactly what is happening because of the high volume of new cases and other asbestos-related bankruptcies," Foote said.

The company's action follows its June 4 announcement which warned of the move.

Since 1994, USG has been named in more than 250,000 asbestos-related personal injury claims, and has paid more than $450 million for litigation. In addition, the company has received more than 22,000 new claims since the beginning of this year.

USG's personal injury costs as a result of asbestos, have risen dramatically from $30 million in 1997 to more than $160 million in 2000, and were expected to surpass $275 million in 2001.

As of March 31, 2001, the company reported consolidated assets of $3.25 billion and non-asbestos liabilities of $1.88 billion.

"While it is impossible to predict exactly how long our reorganization will take, our goal is to complete the restructuring and emerge from Chapter 11 as quickly as possible, with a comprehensive and final resolution to U.S. Gypsum's asbestos liability," said Foote. graphic

  RELATED STORIES

USG may file for bankruptcy - June 4, 2001

Owens Corning files for Chapter 11 protection - Oct. 5, 2000

W.R. Grace files for Ch. 11 - Apr. 2, 2001





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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.