Under the agreement, the company will establish and fund a personal injury trust to pay asbestos personal injury claims. The bank lenders, bondholders and trade suppliers will be paid in full with interest. Stockholders will retain ownership of the company. Financing for the plan is expected to be provided from the company's cash on hand, a $1.8 billion rights offering to existing stockholders backstopped by Berkshire Hathaway Inc., tax refunds and new long-term debt. The terms of the agreement will be contained in a plan of reorganization that the company expected to file in February along with a disclosure statement. After voting on the plan, it will require approval by both the bankruptcy court and the district court that oversees the cases.
"This agreement will achieve the key goals we established when USG and its subsidiaries filed Chapter 11 in 2001," said William C. Foote, chairman and CEO. "Upon final court approval, our trade creditors, bank lenders and bondholders will be paid in full, in cash, with interest; USG and its subsidiaries will emerge from Chapter 11 free of all asbestos personal injury claims; significant shareholder equity will be preserved; and we will emerge with a solid balance sheet that will enable us to continue to invest and grow the company. Importantly, after more than four years in Chapter 11, the agreement will also enable compensation to flow to claimants who have suffered an asbestos-related illness."