DJ Owens Illinois, Crown Cork Dn -2: Others May Follow USG
25 Jun 14:11
By Kathy Chu
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Investors took USG Corp.'s (USG) Monday bankruptcy
filing as a bad omen for other companies struggling with asbestos-related
litigation.
On Monday, shares of Owens-Illinois Inc. (OI) fell 12% and shares of Crown
Cork & Seal Co. (CCK) dropped 10%. The two companies discontinued the use of
asbestos years ago but continue to suffer from personal-injury claims.
"There seems to be no light at the end of the tunnel," said Bear Stearns &
Co. analyst Gary Schneider. "It's not the last company we're going to see file
bankruptcy."
Schneider said it seems to be more "in vogue" for companies to seek this
protection as they face thousands of lawsuits stemming from their use of
asbestos, which can cause lung disease.
Owens-Illinois, Toledo, Ohio, may have a high chance of survival without
Chapter 11, according to Schneider, because it was one of the first companies
to stop using asbestos. It stopped using asbestos in 1958. The company now
makes plastic packaging and glass containers.
USG first considered bankruptcy protection in early June due to mounting
legal bills. The company's Monday filing follows those of Owens Corning (OWC),
W.R. Grace & Co. (GRA) and Armstrong Holdings Inc. (ACK) in the past year. In
all, approximately 27 companies have declared bankruptcy due to asbestos
litigation.
Neither Owens-Illinois nor Crown Cork could be immediately reached for
comment.
Shares of Owens-Illinois were recently down 81 cents to $6.14 on volume of
540,200 compared with average daily volume of 294,700.
Shares of Crown Cork were recently down 36 cents to $3.23 on volume of 1.3
million compared with average daily volume of 887,500.
(MORE) DOW JONES NEWS 06-25-01
02:11 PM |
