Free Remark - District Court of Delaware - Delaware

e Case 1 :05-cv-00217-JPF Document 3-18 Filed 04/13/2005 Page 1 of 4
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
V ‘‘"'‘'‘‘‘‘‘‘‘‘‘‘·‘‘‘"‘'‘‘‘‘‘‘‘‘'‘‘··········‘‘‘‘‘‘‘···· X
IN RE Z
OWENS CORNING, g gl., Chapter 11
Case Nos. 00-3837 t0 3854 (JKF)
: (J ointly Administered)
Debtors. :
: Related to D.I. N0. 14180
: Hearing Held February 28, 2005
: Agenda Item N0. 4
---—------—--------------———---——-----------——---—----- X
CERTIFICATION OF COUNSEL FOR CREDIT SUISSE FIRST BOSTON ("CSFB"),
AS AGENT, REGARDING A PROPOSED ORDER DENYING CSFB’S
MOTION FOR AN ORDER AUTHORIZING IT TO COMMENCE AN
ADVERSARY PROCEEDING ON BEHALF OF THE DEBTORS’ ESTATES
AGAINST CERTAIN PHYSICIANS WHO FALSELY REPORTED X-RAY
READINGS AS POSITIVE FOR ASBESTOS-RELATED IMPAIRMENT
The undersigned, counsel to Credit Suisse First Boston ("CSFB"), as Agent for
the pre-petition bank lenders to Owens Corning and certain of its subsidiaries (the "Bank
Lenders"), hereby certifies that:
1. On January 12, 2005, CSFB tiled a Motion for an Order Authorizing it to
Commence an Adversary Proceeding on Behalf of the Debtors’ Estates Against Certain
Physicians Who F alsely Reported X-Ray Readings as Positive for Asbestos-Related Impairment
(Docket No. 14180) (the "Motion").
2. On February 10, 2005, Owens Corning timely tiled a response and
conditional objection to the Motion (Docket Nos. 14466 and 14467) ("Conditional Opposition").
The Conditional Opposition requested that the Court condition any permission to proceed
derivatively on CSFB’s agreement to provide an indemnity against potential counterclaims
against the Debtors.
404.002-7237

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3. On February 18, 2005, CSFB requested leave to file a reply memorandum
in further support of the Motion (Docket No. 14515), which the Court granted by order dated
March 8, 2005. CSFB filed the Reply ("Reply") on March 10, 2005 (Docket No. 14649).
4. A hearing on the Motion was held before the Court on February 28, 2005.
During the hearing, the Court indicated that it would deny the Motion unless CSFB, as Agent,
agreed to indenmify Owens Coming, or provide equivalent security, against cotmterclaims
asserted against the estate (Hearing Tr. 20).
5. Counsel for CSFB stated that CSFB would provide an inderrmity, given
the Court’s stated intent to deny the Motion and given the statute of limitations concems about
any further delay in prosecuting the Adversary Proceeding contemplated by the Motion (Hearing
Tr. 22).
6. Counsel for Owens Corning responded that with an appropriate indenmity,
Owens Corning was prepared to drop its objection to the Motion (Hearing Tr. 22-23). The Court
reserved ruling on the Motion subject to the parties reaching agreement on an indemnity
acceptable to both sides after the hearing (Hearing Tr. 25).
7. Following the February 28, 2005 hearing, CSFB and other members of the
bank lending syndicate’s Steering Committee conferred internally about the indemnity condition
required by the Court and concluded that it was not an arrangement to which they could agree
with Owens Corning. Members of the Steering Committee contacted Owens Corning directly
and asked whether Owens Coming would agree to forego the indemnity requirement or, if not,
then agree to abandon the proposed B-reader claims to CSFB — subject to an appropriate sharing
arrangement of any recoveries — in order to ameliorate Owens Coming’s concerns about
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counterclaims. Owens Corning has not agreed to drop the indemnity condition or to abandon the
claims to CSFB.
8. On March ll, 2005, Owens Corning filed a Certification of Counsel and
Proposed Order containing the following language:
3. CSFB shall indemnify and hold harmless Owens Corning,
its directors, officers, agents, professionals and employees against
any and all judgments, settlements, fines, penalties, sanctions,
costs and expenses, including but not limited to legal fees,
incurred in connection with any claims or counterclaims brought
by the defendants in, or arising out of, the Adversary Proceeding.
FURTHER ORDERED, that CSFB shall have the right to
seek to discontinue or settle the Adversary Proceeding upon
reasonable notice to Owens Corning, the official committees and
the Futures Representative, and an opportunity to be heard
thereon. This right shall not extinguish CSFB’s obligation to
indemnify and hold harmless Owens Corning, its directors,
officers, agents, professionals and employees, as described in
paragraph 3 above.
(Docket No. 14656).
9. CSFB does not consent to Owens Corning’s Proposed Order. CSFB and
Owens Corning have not agreed on an indemnity and CSFB maintains its position (as set out in
the Reply) that an indemnity may not be required in this circumstance. Accordingly, attached
hereto as Exhibit A is a proposed order denying the Motion because CSFB has not satisfied the
Court’s condition on granting the Motion (the "Proposed Order").
10. CSFB respectfully requests that the Court enter the Proposed Order at the
earliest convenience ofthe Court.
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Dated: March 14, 2005
LAND ! 5 · s V z rz .
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r chard iobb I.D. N0. 3157)
Rebecca L. Butcher (I.D. No. 3816)
919 Market Street, Suite 600
Wilmington, Delaware 19810
Tel: (302) 467-4400
Fax: (302) 467-4450
Attorneys for Credit Suisse First Boston, as Agent
Of Counsel:
Barry R. Ostrager
Tyler B. Robinson
Robert J. Pfister
Katharine E. Nolan
SIMPSON THACHER & BARTLETT LLP
425 Lexington Avenue
New York, New York 10017-3954
Tel: (212) 455-2000
Fax: (212) 455-2502
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