USG Files Chapter 11, Citing Asbestos Claims

USG Corp. succumbed to multimillion-dollar asbestos claims, filing for Chapter 11 bankruptcy protection for the second time in the Chicago firm’s 99-year history. The nation’s No. 1 maker of wallboard became the eighth company in the last 18 months to turn to bankruptcy court to shield it from the financially debilitating effects of asbestos litigation.

USG’s major domestic subsidiaries also filed Chapter 11 petitions, including United States Gypsum Co., USG Interiors Inc. and L&W; Supply Corp. The company’s international operations were not included in the filing.

USG also said it had received a three-year, renewable commitment for up to $350 million in debtor-in-possession financing from JP Morgan Chase & Co.

The Chapter 11 filing effectively shuts down pending litigation, which is scattered in courtrooms all over the country, and consolidates it in U.S. Bankruptcy Court in Delaware.

USG fell 15 cents to $3.83 on the NYSE.