Clapper, Patti, Schweizer and Mason

Pittsburgh Corning Corporation (PCC), a 50% owned affiliate of PPG Industries, Inc. since 1937, first filed for Chapter 11 Protection in 2000. In 2002, PPG entered into a settlement in which they agreed to reserve about $900 million for asbestos-related claims. In 2006, PPG’s attempts to set up an amended plan were denied in Bankruptcy Court.   Judge Judith Fitzgerald stated that the plan was too broad in addressing asbestos claims and included some that were not associated with PCC. 

 

On January 29, 2009, PPC filed a third amended plan of reorganization which addresses the judge’s previous concerns and would permanently resolve PPG’s liabilities associated with Pittsburgh Corning.   

The modified plan proposes the creation of an $825 million trust to settle current and future asbestos-related claims over a fifteen year period. Under the amended plan, any lawsuits against PPG related to asbestos-containing products manufactured, distributed, or sold by Pittsburgh Corning would be covered by the trust.  The $900 million reserved by PPG under the 2002 settlement would be modified so that $735 million would be allocated to settle claims and the remaining $165 million would be kept for other asbestos-related claims.  Under the new plan, the trust would also receive approximately $1.6 billion from PPG’s insurance carriers, which would make cash contributions until 2027.

This third plan is subject to approval by the federal bankruptcy court and has to be accepted by various asbestos claimants. The overall approval process could take up to a year or longer. 

 

The modified plan is a good step towards resolving the company’s long-term asbestos litigation. Pittsburgh Corning used to manufacture, distribute and sell industrial thermal pipe insulation composed of amosite asbestos fibers. Exposure to asbestos can cause many serious health conditions, including asbestosis, mesothelioma and lung cancers. Pittsburgh Corning is charged with knowing of the health hazards associated with their asbestos products, failing to inform or warn employees, and failing to establish safe handling conditions of the dangerous material. 

 

PPG and PCC no longer manufacture any products containing asbestos.

 

The current case for modification is Pittsburgh Corning Corp., case number 00-22876, in the U.S. Bankruptcy Court for the Western District of Pennsylvania.