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PPG Corning bankruptcy plan receives preliminary approval

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By Timothy Puko
Friday, May 17, 2013, 10:45 a.m.
 

Hundreds of thousands of cancer and asbestos victims whose claims against Pittsburgh Corning Corp. have been mired in bankruptcy court for 13 years may have to wait months — or even years — before they receive a payout from a $3.5 billion trust fund tentatively approved by a federal judge this week.

The fund is part of a Chapter 11 bankruptcy reorganization plan for Pittsburgh Corning that would require PPG Industries Inc. and Corning Inc. to give up their ownership of the Plum-based glassmaker and contribute several hundred million dollars to compensate victims of asbestos poisoning. Their insurers would have to kick in $1.7 billion.

The plan, the fourth attempt by the company to emerge from bankruptcy court protection and resolve more than 230,000 asbestos-related lawsuits, received preliminary approval Thursday from U.S. Bankruptcy Court Judge Judith K. Fitzgerald. But PPG Corning CEO Phil Martineau and lawyers for some of the victims said appeals and the process for analyzing and approving claims may tie up payments for months — if not years.

The plan still needs Fitzgerald's final approval, which is scheduled next Thursday in Bankruptcy Court in Pittsburgh.

“It's a travesty that it's taken 13 years to get resolved. It's a sad circumstance for my clients,” said Bruce Mattoch, a Downtown attorney at Goldberg Persky & White, which is representing thousands of people in the case.

Many have already died, and some of their children have, too, he said. “It's very disappointing to have to wait this long when these people truly deserve to get taken care of. And it's not that Judge Fitzgerald hasn't tried.”

Garlock Sealing Technologies LLC — a New York company that blamed Pittsburgh Corning for asbestos suits filed against it — and one of the PPG Industries' insurers, Mt. McKinley Insurance Co., already filed objections that Fitzgerald dismissed. Garlock officials could not be reached. A spokeswoman at McKinley's parent company, Everest Re Group, Ltd. in Bermuda, said the company does not talk to reporters.

Officials at Pittsburgh Corning, PPG and Corning all said they were eager to get the case resolved. Downtown-based PPG said it has been putting money aside in order to pay the $825 million it will owe the trust. It also has to contribute 1.4 million PPG shares. Corning's share of the trust payments is $290 million.

Pittsburgh Corning just had the best year in its 76-year history and won't need to make staff cuts or operational changes, Martineau said. It had about $300 million in revenue last year, Martineau said, declining to give any exact figures.

Pittsburgh Corning has less than 100 employees at its Plum headquarters. The company has prospered despite the legal cloud because it makes glass insulation for tanks that hold liquefied natural gas, a product in greater demand because of the country's natural gas boom, he said.

“It's fun to talk about a very successful, very profitable” company, something officials have had to limit because of the legal entanglements, Martineau said. “It'll be fun to have a coming-out party in terms of what we do locally as a responsible corporate citizen and worldwide as a nice Pittsburgh company.”

Between 1962 and 1972, the company manufactured pipe insulation that contained asbestos. Workers began filing lawsuits even as early as the mid-1960s, with the influx that pushed it into bankruptcy starting about 30 years later, court documents said. Before it voluntarily asked for the court's protection to reorganize, Pittsburgh Corning already had defended and resolved more than 200,000 claims, costing about $1.2 billion.

Fitzgerald rejected the first reorganization plan because the owners tried to use it to cover asbestos claims unrelated to Pittsburgh Corning. She rejected the third plan in 2011 saying they needed to clarify how to handle the claims. The plan she approved this week is an amended version of the third plan.

The system divides disease victims into eight classes, ranging from the deadliest form of cancer on the list, mesothelioma, to less severe cancers and illnesses including asbestosis, lawyers said. It uses a formula factoring in age, family and other factors to determine a payout, which has yet to be determined, lawyers said. Based on current estimates of the value of the fund and the company, it will be able to pay out only about 37 percent of what each victim is entitled to, the court record and lawyers said.

Timothy Puko is a staff writer for Trib Total Media. He can be reached at 412-320-7991 ortpuko@tribweb.com.

 

 
 


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