Free Remark - District Court of Delaware - Delaware

Case 1:05-cv—OO217-JPF Document 3-5 Filed O4/13/2005 Page 1 of 3
EXHIBIT H

Case 1 :05-cv—00217-JPF Document 3-5 Filed 04/13/2005 Page 2 of 3
SIMPSON TI-IAGHER at BARTLETT LLP
425 LEXJNG'PON AVENUE
Nnw Yann, N.Y. 10011-:3954
1212) 455-2000
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21].455.2655 bostrage¤@stblaw.com
January 28, 2005
Re: In re Owens Corning, et al., in the United States District
Court for the District of Delaware, Civil Action No. 05-40
JPF Bankr. Case No. 00-3837 JKF
The Honorable John P. Fullam
United States District Court for the
Eastern District of Pennsylvania
United States Courthouse
601 Market Street, Room #15614
Philadelphia, PA 19106-1780
Dear Judge Fullarnz
This firm represents Credit Suisse First Boston ("CSFB"), as agent for the
pre-petition bank lenders to the Debtors in the above-referenced bankruptcy case. I write
respectfully to call Your Honor's attention to a matter of immediate concem.
On January 12, 2005 CSFB filed a motion in the Bankruptcy Court seeking
authorization to commence derivatively on behalf of the Debtors’ estates an adversary
proceeding against B-readers who falsely reported x-ray readings as positive for asbestos-
related disease in support of asbestos personal injury claims that were paid by the Debtors
pre-petition (the "Motion to Proceed Derivatively"). See Bankr. Docket No. 14180. On the
same day, CSFB also filed a motion to withdraw the reference to the Bankruptcy Court with
respect to the Motion to Proceed Derivatively (the "Motion to Withdraw the Reference") so
that this Court determines whether CSFB may proceed with the lawsuit — the same Court
that would preside over the jury trial action CSFB has proposed. See Barrkr. Docket No.
14181.
Owens Corning has refused CSFB’s demand that it initiate the suit on its own
behalf in a letter that was appended to the Debtors’ opposition to CSFB’s Motion to
Withdraw the Reference. We enclose with this letter a courtesy copy of CSFB’s Reply to
the Debtors, filed with the Court today on an expedited basis. Of immediate concern to
CSFB, however, is the statute of limitations that continues to run on CSFB‘s proposed
claims against the B—readers while the Motions to Proceed Derivatively and to Withdraw the
Reference are sub judice.
CSFB’s draft complaint (a copy of which was submitted to this Court with
the Motion to Withdraw the Reference) is based in large part upon the May 21, 2002 Report
of Dr. Gary K. Friedman, a board-certified pulmonologist whom Owens Corning retained —
in connection with the claims estimation proceedings over which this Court recently
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Case 1 :05-cv—00217-JPF Document 3-5 Filed 04/13/2005 Page 3 of 3
Sxmpson THACHE11 at BARTLETT LLP
The Honorable John P. Fullam —2- January 28, 2005
presided — to study the validity of nonmalignant asbestos personaldnjury claims that were
paid by Owens Corning pre-petition in connection with its National Settlement Program. As
this Court is likely already aware, Dr. Friedman's report concluded that more than 86% of
the 1,691 nonmalignant claims he studied were unsupported by adequate medical evidence
and should not have been paid. See Exhibit B to the Motion to Proceed Derivatively at 1111
41-50, attached as Exhibit 1 to the Memorandum of Law in Support of the Motion to
Withdraw the Reference, Bankr. Docket No. 14183.
Under Delaware’s borrowing statute, the applicable statute of limitations for
CSFB's proposed fraud and negligent misrepresentation claims is no more than three years
(subject to fraudulent concealment and other equitable tolling doctrines). See 10 Del. C. §§
8121, 8106. The three-year anniversary ofthe Friedman Report is this May 21, 2005.
Despite the fact that CSFB has filed the Motion to Proceed Derivatively well within the
three-year statute of limitations, CSFB is concemed that the Motion may not be decided
within the applicable limitations period. ln this connection, we are mindful that the
determination of when the statute commences to run is fact intensive, and CSF B is not
presently in a position to know all the facts} but anticipates that defendants may try to argue
that the statute commenced running earlier than the date the Friedman Report was issued.
For this reason, CSFB is concemed that with each passing day, the statute of limitations
becomes more of an issue, for no reason other than that a creditor must seek authorization to
sue derivatively when the Debtor has refused the creditor’s demand.
1 write respectfully to request that Your Honor permit CSFB to toll the statute
of limitations by provisionally tiling the proposed complaint against the B-readers while the
motions for authorization to sue and to withdraw the reference are pending. CSFB would
immediately withdraw the provisional complaint in the event the Motion to Proceed
Derivatively is denied. I have taken the liberty of attaching a proposed order. Should the
Court desire a conference to discuss this matter further, counsel for CSF B are available at
_ Your Honor's earliest convenience.
Res tfully,
if
2; ·
{Barry R. Os ger
cc: The Honorable Judith K. Fitzgerald fi
Owens Coming Service List (attached)
Enc.
I CSFB did not even obtain a copy of the May 21, 2002 Friedman Report until
September 3, 2004.