Summary
Corning Incorporated (GLW) filed an 8-K on May 17, 2013, to report on the interim confirmation of the Modified Third Amended Plan of Reorganization for Pittsburgh Corning Corporation (PCC), a joint venture where Corning holds a 50% stake. The court confirmed the plan on an interim basis, with a final order contingent on reviewing reconsideration motions and a potential appeals process. This development is significant as it addresses long-standing personal injury claims related to asbestos-containing products manufactured by PCC.
Key Highlights
- 1Corning's 50%-owned joint venture, Pittsburgh Corning Corporation (PCC), received interim confirmation of its Modified Third Amended Plan of Reorganization from the U.S. Bankruptcy Court.
- 2The plan aims to channel all current and future personal injury claims against Corning related to PCC's asbestos products to a trust for resolution.
- 3Corning is obligated to make a series of payments to the trust, totaling approximately $315 million over six years, starting one year after the plan becomes effective.
- 4Corning has the option to settle these payment obligations using its own shares instead of cash, though the liability is fixed in dollar value.
- 5Corning will also contribute its equity interests in PCC and Pittsburgh Corning Europe N.V. (PCE).
- 6The fair value of PCE was noted to significantly exceed its carrying value of $150 million as of April 30, 2013.
- 7Corning's estimated liability under the Amended Plan was $524 million as of April 30, 2013.
- 8Corning relinquished its claim for reimbursement from insurance carriers involved in the bankruptcy, with certain exceptions.
Frequently Asked Questions
The court order grants interim confirmation of the Modified Third Amended Plan of Reorganization for Pittsburgh Corning Corporation. This plan is designed to resolve all current and future personal injury claims against Corning related to asbestos-containing products manufactured by Pittsburgh Corning by channeling these claims to a trust.
Corning is required to make several payments to the trust, totaling $315 million over a six-year period following the plan's effective date. These payments include an initial $70 million payment, followed by a series of $50 million and $35 million payments. Additionally, Corning will contribute its equity interests in Pittsburgh Corning Corporation and Pittsburgh Corning Europe N.V. (PCE).
Yes, Corning has the option to use its shares instead of cash to make the required payments. However, the liability is fixed by its dollar value, not by the number of shares used.
As of April 30, 2013, Corning's liability under the Amended Plan was estimated to be $524 million. This figure includes the future payments and the contribution of equity interests, offset by the value of insurance reimbursements and other factors. The actual cash outlay will be the sum of the scheduled payments, with the option to use shares.