Owens Corning's 1997 acquisition of vinyl siding maker Fibreboard Corp. may be voided if some Owens Corning unsecured creditors get their way.
The dispute over the acquisition has its roots in asbestos litigation. Some Owens Corning creditors say Fibreboard or certain affiliates, or both, either were insolvent or were made insolvent by the $660 million acquisition. If that is true, lawyers say, Owens Corning debtors could not have received fair value in the acquisition.
Owens Corning filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code in 2000, three years after the Fibreboard deal.
In emergency papers filed Sept. 11 in U.S. Bankruptcy Court in Wilmington, Del., committee members asked for the court's authority to file suit against the Toledo, Ohio-based building-products concern. The court has scheduled a Sept. 24 hearing with an Oct. 4 deadline for filing the suits.
The Fibreboard transaction launched Owens Corning full force into vinyl siding production, securing the Norandex and Vytec brands. But Fibreboard was saddled with its own asbestos cases even before Owens Corning gobbled it up.
Owens Corning spokesman Dave Dimmer said Sept. 13 that the company will review the Fibreboard transaction to determine what action is appropriate.
``The Fibreboard transaction was a tender offer for a public company and was negotiated at arm's length,'' Dimmer said. ``At the time, we thought it was a sound business opportunity to acquire vinyl siding and other building material assets.''
Owens Corning unsecured creditors want to set aside the acquisition along with Owens Corning's assumption and repayment of Fibreboard's debt.
In a similar asbestos-related case, Sealed Air Corp. will head to U.S. District Court in Wilmington on Sept. 30 to decide whether plaintiffs in asbestos-related cases can force the firm to return its Cryovac specialty films division to W.R. Grace & Co.