USG Corp. recently announced that it has received bankruptcy court approval to, among other things, pay pre-petition and post-petition employee wages, salaries and benefits during its voluntary Chapter 11 case. As previously announced, USG and its major U.S. subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code on June 25, 2001, to manage the growing asbestos litigation costs of its United States Gypsum Co. subsidiary and to resolve asbestos claims in a fair and equitable manner. The court also approved $150 million of interim debtor-in-possession (DIP) financing for immediate use by the company to continue operations, pay employees, and purchase goods and services going forward. In conjunction with the filing, USG received commitments for up to $350 million in DIP financing from JP Morgan Chase to supplement liquidity and fund operations during the restructuring process. A final hearing on the DIP agreement is expected to occur in 30 to 60 days. The court also granted approval for the company to honor customer programs in place at the time of the filing, including rebates, credits and discounts on previously purchased goods.
William C. Foote, chairman, president and chief executive officer, said that USG's operations continue without interruption during the Chapter 11 process. "Our operations remain open for business and will maintain their commitment to safety, and to providing quality products and superior service to their customers. Vendors will be paid for all goods furnished and services provided after the filing. Employee wages and benefit programs will continue as before." USG and its subsidiaries filed their voluntary petitions in the U.S. Bankruptcy Court for the District of Delaware in Wilmington. The filing also included U.S. subsidiaries United States Gypsum Co., USG Interiors, Inc. and L&W Supply Corp. USG's international operations were excluded form the filing.
Additional information about the company's restructuring is available at