PPG Industries announced that the United States Bankruptcy Court for the Western District of Pennsylvania issued an opinion and interim order confirming the current Pittsburgh Corning plan of reorganization. PPG and Corning Incorporated are each 50 percent shareholders of Pittsburgh Corning, which filed for Chapter 11 bankruptcy protection in 2000. The court also set a deadline of May 21, 2013, for submission of motions for reconsideration, which will be heard on May 23, 2013. The court stated that after hearing such motions, the court will issue a final confirmation order.
Under the terms of the current plan, which includes the PPG asbestos settlement arrangement, all current and future personal injury claims against PPG relating to exposure to asbestos-containing products manufactured, distributed or sold by Pittsburgh Corning will be channeled to a trust for resolution. The final confirmation order will be subject to a customary appeals process and, if the confirmation order is upheld and all conditions are met, the plan of reorganization would become effective. Under the plan of reorganization, PPG and its participating insurers are to make their initial payments to the trust 30 business days after the plan becomes effective and all conditions to funding have been met.
Under the PPG settlement arrangement, PPG’s obligation to the trust consists of cash payments totaling approximately $825 million to be made according to a fixed payment schedule over a period ending in 2023, about 1.4 million shares of PPG stock or cash equivalent, and surrendering its shares in Pittsburgh Corning and Pittsburgh Corning Europe. At March 31, 2013, PPG’s accrued liability related to the settlement arrangement, including the pre-tax present value of the cash payments, totaled approximately $800 million of which approximately $550 million was the current portion. In addition to PPG’s obligation to the trust, the company’s participating historical insurance carriers are to make cash payments to the trust of approximately $1.7 billion in a series of payments ending in 2027.