Corning has reached an agreement to settle all current and future asbestos claims against both itself and Pittsburgh Corning Corporation (PCC).
As a result of the settlement, Corning expects to record an after-tax charge of approximately $200 million in its first quarter financial results.
The agreement is expected to be incorporated into a settlement fund as part of a reorganisation plan for PCC, which filed for bankruptcy protection in April 2000.
The plan will be submitted to the federal bankruptcy court in Pittsburgh for approval. It is subject to a favourable vote by 75% of the asbestos claimants voting on the PCC reorganisation plan. Corning will make its contributions to the settlement trust under the agreement after the plan is approved and no longer subject to appeal. The approval process could take one year or longer.
When the plan becomes effective, Corning’s settlement will require the contribution of Corning’s equity interest in PCC, its one-half equity interest in Pittsburgh Corning Europe NV, a Belgian corporation, and 25 million shares of Corning common stock.
Corning also will be making cash payments with a current value of $130 million over six years beginning in June 2005. In addition, the company will assign insurance policy proceeds from its primary insurance and a portion of its excess insurance as part of the settlement.