filed a voluntary petition to reorganize under Chapter 11 bankruptcy protection in order to address increasing demands on its cash flow, which stem from its long-standing, multibillion-dollar asbestos liability.
The Toledo, Ohio, building materials company filed for bankruptcy in Wilmington, Del., and listed just under $7 billion in total assets and $5.71 billion in total liabilities, according to
Federal Filings Business News
. Owens Corning received a $500 million debtor-in-possession financing commitment from
Bank of America
Owens Corning's stock has fallen significantly in recent months because of the company's long asbestos litigation battle, a dispute that has plagued the company for years. Although the company stopped selling asbestos-containing insulation in 1972, many lawsuits were launched in the mid-1980s from people suffering from asbestos-related illnesses. The company has taken hundreds of millions of dollars in charges against its earnings in recent years to absorb the cost of asbestos litigation, including a $542 million charge in 1996.
Industry-wide problems, such as the slowing homebuilding industry, softening demand for building materials and rising energy costs, also hurt the company's net income.
The company said it won't make payments to asbestos claimants for the duration of the Chapter 11 proceeding. The company added that it will omit its quarterly dividend payment in October and won't make any interest or other payments on its unsecured debt securities.
Standard & Poor's
replaced Owens Corning in the
index last Friday for "lack of representation," and replaced the company with
Shares of Owens Corning closed at $2 on the
New York Stock Exchange
Wednesday, down 25 cents, or 11.1%. The company's shares were halted this morning and haven't traded. The stock traded as high as $23 on Oct. 5, 1999, but fell as low as $1.81 on Wednesday.