Glass manufacturer Pittsburgh Corning emerges from Chapter 11 bankruptcy 16 years after filing through transfer of its ownership to a $3.5 billion asbestos trust fund. The trust will pay for asbestos claims now and into the future for the company’s manufacturing plants in Port Allegany, Texas, Missouri, Czech Republic, Belgium and China.
$500 million in cash and 2.8 million shares of common stock will be given to the trust fund right away. Another $350 million will be added by 2023.
The Asbestos Personal Injury Settlement Trust will fund asbestos claims for the manufacturer’s parent company PPG, which has operations across the globe. This was the result of Chapter 11 bankruptcy filed in April 2000 from many years of hundreds of thousands of claims due to Unibestos.
Unibestos was an insulated pipe manufactured by Pittsburgh Corning from 1962 to 1972 that caused mesothelioma cancer, an aggressive cancer affecting the membrane lining of the lungs and abdomen, and other health problems for its employees.
The Chapter 11 case ended in January 2016 with all pending appeals and challenges to the company’s reorganization plan being withdrawn.
Pittsburg Corning’s Chapter 11 case was on par in terms of time with asbestos manufacturer W.R. Grace & Co.’s own bankruptcy case. Corning’s went much longer than its original predictions for length, taking 16 years. Grace & Co. took over 12 years.
“When it became apparent that Pittsburgh Corning’s time in bankruptcy was going to be extended, our focus expanded to include strategic actions designed to reinvent our business to better serve customers worldwide and create a platform for sustained profitable growth for our future shareholders,” said the Pittsburgh Corning Chairman and CEO, James R. Kane.
“Today, Pittsburgh Corning has achieved both goals. After 16 years of operating under Chapter 11, the Asbestos Personal Injury Settlement Trust can begin helping people and families. The company has performed well and is eager to move past Chapter 11 toward a promising future,” said Kane.
These types of asbestos trust funds were set up under the bankruptcy code in 1994 for bankrupt manufacturers and their insurers to be able to compensate workers and their families who were affected by companies’ asbestos exposure on the job.