================================================================= USG BANKRUPTCY NEWS Issue Number 1 ----------------------------------------------------------------- Copyright 2001 (ISSN XXXX-XXXX) June 27, 2001 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 609-392-0900 FAX 609-392-0040 ----------------------------------------------------------------- USG BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 24 Perdicaris Place, Trenton, New Jersey 08618, On an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in the Debtors' cases. Each issue is prepared by Peter A. Chapman, Editor. Subscription rate is US$45 per issue. Reproduction and re-mailing of USG BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00000] HOW TO ORDER A SUBSCRIPTION TO USG BANKRUPTCY NEWS [00001] BACKGROUND & DISCRIPTION OF USG CORPORATION [00002] CONSOLIDATED BALANCE SHEET AT MARCH 31, 2001 [00003] COMPANY'S PRESS RELEASE CONCERNING CHAPTER 11 FILING [00004] USG DEBTORS' CHAPTER 11 DATABASE [00005] LIST OF USG DEBTORS' 50 LARGEST UNSECURED CREDITORS [00006] DEBTORS' MOTION FOR JOINT ADMINISTRATION OF PROCEEDINGS [00007] DEBTORS' MOTION TO HONOR PREPETITION EMPLOYEE OBLIGATIONS KEY DATE CALENDAR ----------------- 06/25/01 Voluntary Petition Date 07/10/01 Deadline for filing Schedules of Assets and Liabilities 07/10/01 Deadline for filing Statement of Financial Affairs 07/10/01 Deadline for filing Lists of Leases and Contracts 07/15/01 Deadline to provide Utilities with adequate assurance 08/24/01 Deadline to make decisions about lease dispositions 09/23/01 Deadline to removal actions pursuant to F.R.B.P. 9027 10/23/01 Expiration of Debtors' Exclusive Plan Proposal Period 12/22/01 Expiration of Debtors' Exclusive Solicitation Period 06/24/03 Deadline for Debtors' Commencement of Avoidance Actions Organizational Meeting with UST to form Committees Bar Date for filing Proofs of Claim First Meeting of Creditors pursuant to 11 USC Sec. 341 ----------------------------------------------------------------- [00000] HOW TO ORDER A SUBSCRIPTION TO USG BANKRUPTCY NEWS ----------------------------------------------------------------- USG BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtors' cases. The subscription rate is $45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. To continue receiving USG BANKRUPTCY NEWS, please complete the form below and return it by fax or e-mail to: Bankruptcy Creditors' Service, Inc. 24 Perdicaris Place Trenton, NJ 08618 Telephone (609) 392-0900 Fax (609) 392-0040 E-mail: peter@bankrupt.com We have published similar newsletters tracking billion-dollar insolvency proceedings since 1990. Currently, we provide similar coverage about the chapter 11 cases involving W.R. 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Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- ----------------------------------------------------------------- [00001] BACKGROUND & DISCRIPTION OF USG CORPORATION ----------------------------------------------------------------- Through its subsidiaries, USG Corporation is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. USG's operations are organized into three operating segments: (A) NORTH AMERICAN GYPSUM -- About 54% of Annual Revenues Business -- North American Gypsum, which manufactures and markets gypsum and related products in the United States, Canada and Mexico, includes U.S. Gypsum in the United States, the gypsum business of CGC Inc., in Canada, and USG Mexico S.A. de C.V. in Mexico. U.S. Gypsum is the largest producer of gypsum wallboard in the United States and accounted for nearly one-third of total domestic gypsum wallboard sales in 2000. CGC is the largest producer of gypsum wallboard in eastern Canada. Products -- North American Gypsum's products are used in a variety of building and industrial applications. Gypsum panel products are used to finish the interior walls and ceilings in residential, commercial and institutional construction. These products provide aesthetic as well as sound-dampening and fire-retarding value. The majority of these products are sold under the SHEETROCK brand name. Also sold under the SHEETROCK brand name is a line of joint compounds used for finishing wallboard joints. The DUROCK line of cement board and accessories provides fire-resistant and water-damage-resistant assemblies for both interior and exterior construction. FIBEROCK brand gypsum fiber panels include abuse-resistant wall panels and floor underlayment. The Corporation produces a variety of plaster products used to provide a custom finish for residential and commercial interiors. Like SHEETROCK brand gypsum wallboard, these products provide aesthetic, sound-dampening and fire- retarding value. Plaster products are sold under the trade names of RED TOP, IMPERIAL and DIAMOND. The Corporation also produces gypsum-based products for agricultural and industrial customers to use in a number of applications, including soil conditioning, road repair, fireproofing and ceramics. Manufacturing -- North American Gypsum's products are manufactured at 44 plants located throughout the United States and Canada and in central Mexico. Gypsum rock is mined or quarried at 14 company-owned locations in North America. In 2000, these locations provided approximately 77% of the gypsum used by USG's plants in North America. Certain plants purchase synthetic gypsum or natural gypsum rock from various outside sources. Outside purchases accounted for 23% of the gypsum used in USG's plants. The Corporation's geologists estimate that its recoverable rock reserves are sufficient for more than 30 years of operation based on the Corporation's average annual production of crude gypsum during the past five years. Proven reserves contain approximately 282 million tons. Additional reserves of approximately 154 million tons are found on four properties not in operation. USG's total average annual production of crude gypsum during the past five years was 10 million tons. Paper Mills -- The Corporation owns and operates seven paper mills located across the United States. Vertical integration in paper ensures a continuous supply of high-quality paper that is tailored to the specific needs of USG's wallboard production processes. Research -- The Corporation does research and development at the USG Research and Technology Center in Libertyville, Ill. The staff at this center provides specialized technical services to the operating units and does product and process research and development. The center is especially well- equipped for carrying out fire, acoustical, structural and environmental testing of products and building assemblies. The center also has an analytical laboratory for chemical analysis and characterization of materials. Development activities can be taken to the pilot plant level before being transferred to a full-size plant. Marketing and Distribution -- Distribution is carried out through L&W Supply Corporation, a wholly owned subsidiary of USG, building materials dealers, home improvement centers and other retailers, contractors and specialty wallboard distributors. Sales of gypsum products are seasonal in the sense that sales are generally greater from spring through the middle of autumn than during the remaining part of the year. Based on the Corporation's estimates using publicly available data, internal surveys, and gypsum wallboard shipment data from the Gypsum Association, management estimates that during 2000, about 45% of total industry volume demand for gypsum wallboard was generated by new residential construction activity, 37% of volume demand was generated by residential and nonresidential repair and remodel activity, 13% of volume demand was generated by new nonresidential construction activity and the remaining 5% of volume demand was generated by other activities such as exports and temporary construction. Competition -- The Corporation competes in North America as the largest of 11 producers of gypsum wallboard products and in 2000 accounted for nearly one-third of total gypsum wallboard sales in the United States. In 2000, U.S. Gypsum shipped 9.3 billion square feet of wallboard, the highest level in the Corporation's history, out of total U.S. industry shipments (including imports) estimated at 29.3 billion square feet, the second highest level on record. Principal competitors in the United States are: National Gypsum Company, Georgia- Pacific Corporation, James Hardie Gypsum, BPB Celotex, Temple- Inland Forest Products Corporation, American Gypsum, Lafarge Corporation and other smaller, regional competitors. Major competitors in Canada include BPB Westroc, Georgia-Pacific Corporation and Lafarge Corporation. In Mexico, the Corporation's major competitor is Panel Rey. (B) WORLDWIDE CEILINGS -- About 16% of Annual Revenues Business -- Worldwide Ceilings, which manufactures and markets interior systems products worldwide, includes USG Interiors, Inc., the international interior systems business managed as USG International and the ceilings business of CGC. Worldwide Ceilings is a leading supplier of interior ceilings products used primarily in commercial applications. In 2000, Worldwide Ceilings was estimated to be the largest producer of ceiling grid and the second largest producer of ceiling tile in the world. Products -- Worldwide Ceilings manufactures and markets ceiling grid, ceiling tile, relocatable wall systems and, in Europe and the Asia-Pacific region, access floor systems. USG's integrated line of ceilings products provides qualities such as sound absorption, fire retardation, and convenient access to the space above the ceiling for electrical and mechanical systems, air distribution and maintenance. USG Interiors' significant trade names include the AURATONE and ACOUSTONE brands of ceiling tile and the DX, FINELINE, CENTRICITEE, CURVATURA and DONN brands of ceiling grid. Manufacturing -- Worldwide Ceilings' products are manufactured at 20 plants located in North America, Europe and Asia-Pacific. These include 10 ceiling grid plants, 5 ceiling tile plants, 2 plants that produce other interior products and 3 plants that produce or prepare raw materials for ceiling tile and grid. Principal raw materials used in the production of Worldwide Ceilings' products include mineral fiber, steel, perlite, starch and high-pressure laminates. Certain of these raw materials are produced internally, while others are obtained from various outside suppliers. Shortages of raw materials used in this segment are not expected. Research -- USG Interiors' primary research and development are carried out at the Corporation's research and development center in Libertyville, Ill., and at its Solutions Center(SM) in Chicago, Ill. An additional metal forming research and development facility in Avon, Ohio, provides product design, engineering and testing services in addition to manufacturing development. Marketing and Distribution -- Worldwide Ceilings' products are sold primarily in markets related to the new construction and renovation of commercial buildings. Marketing and distribution are conducted through a network of distributors, installation contractors, L&W Supply, and home improvement centers. Competition -- The Corporation estimates that it is the second-largest producer/marketer of acoustical ceiling tile in the world. Principal global competitors include Armstrong World Industries, Inc., OWA Faserplattenwerk GmbH (Odenwald) and BPB Celotex. As noted above, Armstrong World Industries, Inc., the world's largest manufacturer of acoustical ceiling tile, filed Chapter 11 bankruptcy in the fourth quarter of 2000 in response to pending and potential asbestos litigation filings. The Corporation estimates that it is the world's largest manufacturer of ceiling grid. Principal competitors in ceiling grid include WAVE (a joint venture between Armstrong World Industries, Inc. and Worthington Industries) and Chicago Metallic Corporation. (C) BUILDING PRODUCTS DISTRIBUTION -- About 30% of Revenues Business -- Building Products Distribution consists of L&W Supply, the leading distributor of wallboard and related building products in the United States. In 2000, L&W Supply distributed approximately 11% of all gypsum wallboard in the United States (including approximately 28% of U.S. Gypsum's wallboard production). Marketing and Distribution -- L&W Supply was organized in 1971 by U.S. Gypsum and currently has 192 distribution locations in 37 states. It is a service-oriented organization that stocks a wide range of construction materials and delivers less-than-truckload quantities of construction materials to a job site and places them in areas where work is being done, thereby reducing or eliminating the need for handling by contractors. Although L&W Supply specializes in distribution of gypsum wallboard (which accounts for approximately 53% of its total net sales), joint compound and other products manufactured primarily by U.S. Gypsum, it also distributes products manufactured by USG Interiors such as acoustical ceiling tile and grid, as well as products of other manufacturers including drywall metal, insulation, roofing products and accessories. L&W Supply leases approximately 90% of its facilities from third parties. Usually, initial leases run from three to five years with a five-year renewal option. Competition -- L&W Supply's largest competitor, Gypsum Management Supply, is an independent distributor with locations in the southern, central and western United States. There are several regional competitors, such as CSR Rinker in the southeast (primarily in Florida) and Strober Building Supply in the northeastern United States. L&W Supply's many local competitors include lumber dealers, hardware stores, home improvement centers and acoustical tile distributors. ----------------------------------------------------------------- [00002] CONSOLIDATED BALANCE SHEET AT MARCH 31, 2001 ----------------------------------------------------------------- USG CORPORATION CONSOLIDATED BALANCE SHEETS (UNAUDITED) ASSETS Current Assets: Cash and cash equivalents $35,000,000 Receivables (net of reserves - $18,000,000) 350,000,000 Inventories 267,000,000 Income taxes receivable 33,000,000 Deferred income taxes 168,000,000 Other current assets 75,000,000 -------------- Total current assets 928,000,000 Property, plant and equipment (net of Reserves for depreciation and depletion - $489,000,000) 1,826,000,000 Deferred income taxes 189,000,000 Other assets 309,000,000 -------------- Total Assets $3,252,000,000 ============== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable 193,000,000 Accrued expenses 260,000,000 Notes payable 8,000,000 Current portion of long-term debt 131,000,000 Current portion of asbestos reserve 275,000,000 -------------- Total current liabilities 867,000,000 Long-term debt 647,000,000 Long-term asbestos reserve 855,000,000 Other liabilities 370,000,000 Stockholders' Equity: Common stock 5,000,000 Treasury stock (256,000,000) Capital received in excess of par value 411,000,000 Accumulated other comprehensive loss (6,000,000) Retained earnings 359,000,000 -------------- Total stockholders' equity 513,000,000 -------------- Total Liabilities and Stockholders' Equity $3,252,000,000 ============== ----------------------------------------------------------------- [00003] COMPANY'S PRESS RELEASE CONCERNING CHAPTER 11 FILING ----------------------------------------------------------------- USG Corporation Files Voluntary Chapter 11 Case to Manage Rapidly Increasing Asbestos Litigation Costs and to Resolve Asbestos Liability Obtains Commitment for $350 Million in Dip Financing CHICAGO, Illinois -- June 25, 2001 -- USG Corporation (NYSE: USG) announced today that it filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code to manage the growing asbestos litigation costs of its United States Gypsum Company subsidiary and to resolve asbestos claims in a fair and equitable manner. USG's major domestic subsidiaries also filed Chapter 11 petitions, including United States Gypsum Company, USG Interiors, Inc. and L&W Supply Corporation. "We took this action not only to resolve asbestos lawsuits equitably, but also to protect the long-term value of our business and maintain our leadership position in the market," said William C. Foote, Chairman, President and CEO. "It was important to take the litigation out of a dysfunctional tort system and move it to a single forum where the claims can be objectively evaluated. "The asbestos litigation system is clearly out of control," said Foote. "Lawsuits continue to be filed at a high rate with no slowdown in sight, and most of the claims are filed by people who are not sick. In addition, the recent bankruptcies of other asbestos defendants have dramatically increased U.S. Gypsum's asbestos costs to the point that they are completely out of proportion to its legitimate liability. We have said repeatedly that U.S. Gypsum can afford to pay for its own liability, but it cannot pay for the liability of other companies or pay everyone who was exposed to asbestos-containing products -- yet that is exactly what is happening because of the high volume of new cases and the other asbestos-related bankruptcies." Commenting on the Company's operations, Foote explained, "Our businesses continue to grow, and we remain the leader in our markets. Today's filing is not about restructuring our Company's operating units or dealing with a liquidity crisis. Rather, the Chapter 11 process was the only alternative to prevent the value drain that has been occurring as U.S. Gypsum was forced to pay for the asbestos costs of other companies that have already filed for Chapter 11. The bankruptcy filing includes USG and its other major domestic subsidiaries to address financing needs during the Chapter 11 process and so that all USG companies would be included in the final resolution of U.S. Gypsum's asbestos liability. "We carefully considered other alternatives," continued Foote. "Chapter 11 is the only way to obtain a fair valuation of U.S. Gypsum's asbestos liability -- and it is the best way to preserve value for all of our stakeholders, including our legitimate creditors, our shareholders and our employees." He noted that USG is the eighth company in the last 18 months that has been forced to utilize Chapter 11 to resolve asbestos claims; over the past two decades, 27 companies have filed for protection under Chapter 11 because of asbestos litigation. Since 1994, U.S. Gypsum has been named in more than 250,000 asbestos-related personal injury claims, and has paid more than $450 million (before insurance recoveries) to manage and resolve asbestos-related litigation. Further, U.S. Gypsum has received more than 22,000 new claims since the beginning of this year. U.S. Gypsum's asbestos personal injury costs (before insurance) have risen from $30 million in 1997 to more than $160 million in 2000, and were expected to exceed $275 million in 2001. Commenting on the need for federal legislation, Foote said, "We have been advocating and working hard on a legislative solution to the asbestos situation. Legislation is needed; it represents good public policy and we remain committed to finding a legislative solution. However, we simply could not continue to endure the dramatic increase in asbestos costs and still protect USG, its customers, suppliers, employees, shareholders and other important stakeholders." USG also announced it has received a commitment for up to $350 million in debtor-in-possession (DIP) financing from JP Morgan Chase, which will augment the Company's liquidity and fund operations during the restructuring process, and enable the Company to purchase and pay for goods and services going forward. During the restructuring period and beyond, USG's operations will continue without interruption. The Company will maintain its commitment to providing the highest quality products and superior service to customers. Vendors will be paid for all goods furnished and services provided after the filing, and transactions that occur in the ordinary course of business will continue as before. Employees will be paid their normal wages, and benefit programs will continue uninterrupted. Employee interests in the USG Corporation Retirement Plan and the USG Corporation Investment Plan (401k) are held in trust and protected by law. The Company's international operations are not included in the Chapter 11 filing and will continue to conduct business as usual. "While it is impossible to predict exactly how long our reorganization will take, our goal is to complete the restructuring and emerge from Chapter 11 as quickly as possible, with a comprehensive and final resolution to U.S. Gypsum's asbestos liability," Foote said. USG Corporation is a Fortune 500 company with subsidiaries that are market leaders in their key product groups: gypsum wallboard, joint compound, cement board and related gypsum products; ceiling tile and grid; and building products distribution. Additional information about the restructuring is available at www.usg.com or by calling toll-free (877) 874-8400. ----------------------------------------------------------------- [00004] USG DEBTORS' CHAPTER 11 DATABASE ----------------------------------------------------------------- Lead Debtor: USG Corporation 125 South Franklin Street Chicago, IL 60606 Debtor affiliates filing separate chapter 11 petitions: United States Gypsum Company USG Interiors, Inc. USG Interiors, Inc. USG Interiors International, Inc L & W Supply Corporation Beadex Manufacturing, LLC B-R Pipeline Company La Mirada Products Co., Inc. Stocking Specialists, Inc. USG Industries, Inc. USG Pipeline Company Chapter 11 Petition Date: June 25, 2001 Court: United States Bankruptcy Court For the District of Delaware 824 Market Street, Fifth Floor Wilmington, DE 19801 Bankruptcy Case Nos.: 01-02094 and 01-02104 Debtors' Counsel: David G. Heiman, Esq. Jones, Day, Reavis & Pogue North Point 901 Lakeside Avenue Cleveland, Ohio 44114 (216) 586-3939 Fax (216) 579-0212 and Paul E. Harner, Esq. Brad B. Erens, Esq. Jones, Day, Reavis & Pogue 77 West Wacker Chicago, IL 60601 (312) 782-3939 and Daniel J. Defranceschi, Esq. Richards, Layton & Finger One Rodney Square, P.O. Box 551 Wilmington, DE 19899 (302) 658-6541 Debtors' Financial Advisor: Chilmark Partners, LLC 875 North Michigan Avenue Suite 2100 Chicago, IL 60611 (312) 984-9711 Fax (312) 337-0990 ----------------------------------------------------------------- [00005] LIST OF USG DEBTORS' 50 LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Entity Nature Of Claim Claim Amount ------ --------------- ------------ National City Bank of Indenture Trustee $287,330,000 Indiana (1) 9.25% Sr. Notes Catherine S. Krug due 09/15/2001 101 West Washington Street (2) 8.50% Sr. Notes Suite 655 South due 08/1/2005 Indianapolis, IN 46255 (3) Industrial Revenue Tel: (317)262-7789 Bonds Fax: (317)267-7658 Bank One Investment Indenture Trustee- $119,400,000 Management Group Industrial Revenue Joseph J. Morand Bond Global Corporate Trust Services Mail Code IL 1026 One Bank One Plaxa Chicago IL 60670-0126 Tel: (312) 407-1871 Fax: (312) 407-1708 Chase Manhattan Bank Indenture Trustee- $110,000,000 Beth Laird Industrial Revenue One Liberty Place Bonds 52nd Floor 1650 Market Street Suite 5210 Philadelphia, PA 19103 Tel: (215)988-1330 Fax: (215)972-8372 JP Morgan Chase & Co. Bank Loan $65,579,487 Mark Gibbs 227 West Monroe Street 27th Floor Chicago IL 60606 Tel: (312)541-4205 Fax: (312)541-3379 Bank One, N.A. Bank Loan $45,707,692 Diane M. Faunda ILI-0088-14th Floor I Bank One Plaza Chicago, IL 60670-0088 Tel: (312)732-1612 Fax: (312)732-5161 Bank of America, N.A. Bank Loan $45,707,692 Raju N. Patel 231 South LaSalle Street Chicago, IL 60697 Tel: (312) 828-7225 Fax: (312) 987-0303 Citicorp Securities, Inc. Bank Loan $47,692,302 Emily Rosenstock 500 Madison Street Chicago, IL 60661 Tel: (312)627-3981 Fax: (312)627-3990 TD Securities, Inc. Bank Loan $43,723,077 Stephen C. Watts 120 South LaSalle Street Chicago, IL 60603 Tel: (312)984-5401 Fax: (312)782-6337 Sun Trust Bank Bank Loan $31,794,872 Charles C. Pick 303 Peachtree Street NE 3rd Floor Atlanta, GA 30308 Tel: (404)588-7315 Fax: (404)588-8505 The Northern Trust Company Bank Loan $23,846,154 Michelle M. Teteak 50 South LaSalle Street Chicago, IL 60675 Tel: (312)444-3506 Fax: (312)444-5055 Bank of Tokyo- Bank Loan $19,871,795 Mitsubishi, Ltd. Diane M. Tkach 227 W. Monroe Street Suite 2300 Chicago, IL 60606 Tel: (312)696-4663 Fax: (312)696-4535 Barclays Bank PLC Bank Loan $19,871,795 Colin Fraser 54 Lombard Street 1st Floor London, EC3O 3AH Tel: 44-20-7699-2239 Fax: 44-20-7699-4140 Bank Brussels Lambert Bank Loan $19,871,795 Neil J. McMorrow 630 Fifth Avenue 6th Floor New York, NY 10111 Tel: (212)218-5212 Fax: (212)218-5205 Deutsche Bank Bank Loan $19,871,795 Securities, Inc. Thomas W. Cole 223 S. Wacker Drive 84th Floor Chicago, IL 60606 Tel: (312)993-8150 Fax: (312)993-8162 Industrial Bank Bank Loan $19,871,795 of Japan, Ltd. Mizuho Financial Group (MHFG) Steven W. Ryan 227 W. Monroe Street Suite 2600 Chicago, IL 60606 Tel: (312)855-6251 Fax: (312)855-8200 The Sanwa Bank, Limited Bank Loan $19,871,795 Lee E. Prewitt 10 S. Wacker Drive Suite 1825 Chicago, IL 60606 Tel: (312)368-3020 Fax: (312)346-6677 Wachovia Securities, Inc. Bank Loan $19,871,795 James F. Kinoshita 70 W. Madison St. Suite 2440 Chicago, IL 60202 Tel: (312)795-4331 Fax: (312)853-0693 Firstar Bank, N.A. Bank Loan $11,923,077 Mathew Zeck 425 Walnut Street ML CN-WN-08 Cincinnati, OH 45202 Tel: (513)632-3002 Fax: (513)632-2068 Fuji Bank Limited Bank Loan $11,923,077 James S. Bell 225 W. Wacker drive Suite 2000 Chicago, IL 60606 Tel: (312)621-1526 Fax: (312)621-0539 Wells Fargo Bank Northwest Indenture Trustee- $11,000,000 Alice Garrett Industrial Revenue National Association Bonds Corporate Trust Services MAC P6101-114 1300 NW 5th Avenue 11th Floor Portland, OR 97201 Tel: (503)886-4367 Fax: (503)886-3300 American National Bank Indenture Trustee- $7,200,000 Joyce Wallington-Jones Industrial Revenue Global Corporate Trust Bonds Services ILI-1250 120 South LaSalle Street 4th Floor Chicago, IL 60603 Tel: (312)661-5497 Fax: (312)661-6491 Reliant Energy Services Trade Debt $4,800,000 Greg Mason 1600 Smith Street, Ste 1200 Houston, TX 77002 Tel: (713)207-1372 Fax: (713)207-1177 Weirton Steel Trade Debt $2,098,400 Cynde Vidas 400 Three Springs Drive Weirton, WV 26062-9777 Tel: (304)797-2764 Fax: (304)797-2887 Innovative Gas Services Trade Debt $1,848,173 Steve Minke 101 E. 2nd Street, Ste.100 Owensboro, Ky 42303 Tel: (270)684-0459 Fax: (270)684-8414 Dow Chemical Trade Debt $1,660,824 100 Larkin Center Midland, MI 48674 Tel: (517)636-2348 Fax: (517)636-8033 Entergy Trade Debt $1,510,300 John Michelet 639 Loyola Avenue New Orleans, LA 70113 Tel: (504)576-4000 Fax: (504)576-2509 LTV Steel Trade Debt $1,432,619 Joe Yost 200 Public Square Cleveland, OH 44114 Tel: (216)622-5754 Fax: (216)622-1977 Multi-Dynamics Group Trade Debt $1,318,767 Andre Mendzes 1401 Bricknell Avenue Suite 1000 Miami FL 33131 Tel: (305)381-6030 Fax: (305)381-9350 Dietrich Industries, Inc. Trade Debt $1,079,329 Ed Ponko 500 Grant Street Suite 2226 Pittsburgh, PA 15219 Tel: (412)281-2805 Fax: (412)281-2965 Bank One Trust Company Indenture Trustee- $1,000,000 John Stephens Industrial Revenue Corporate trust Department Bonds 111 Monument Circle INI-0151 Indianapolis, IN 46277 Tel: (317)756-1320 Fax: (317)592-5060 Clark Steel Framing System Trade Debt $1,000,000 Bill Courtney 101 Clark Blvd. Middletown, OH 45044 Tel: (513)539-2900 Fax: (513)539-2901 Cypress Truck Lines, Inc. Trade Debt $951,463 David Penland 1414 Lindrose Street Jacksonville, FL 32206 Tel: (904)353-8641 Fax: (904)632-0830 Path Truck Lines Trade Debt $917,492 Fred Payne 3649 East Lake Road Dunkirk, NY 14048 Tel: (716)366-6555 Fax: (716)366-0475 Johns Manville Trade Debt $877,616 Dudley Culton PO Box 5108 Denver, CO 80217-5108 Tel: (303)978-5108 Fax: (303)978-3661 USS Posco Trade Debt $866,554 Charles Kearney 900 Loveridge Road Pitts, CA 94565 Tel: (510)439-6423 Fax: (510)439-6389 OneOK Gas Marketing Trade Debt $843,735 Chris Needem PO Box 2405 Tulsa, OK 74102 Tel: (918)591-5173 Fax: (918)585-9254 California Expanded Metal Trade Debt $841,585 Products Co. Tom Porter 263 Covina Lane City of Industry, CA 91744 Tel: (818) 369-3564 Fax: (818)330-7598 Umthum Trucking Co. Trade Debt $838,642 Tony Russell PO Box 166 Eagle Grove, IA 50533 Tel: (515)448-4707 Fax: (800)526-6518 Coastal Transport, Inc. Trade Debt $829,305 James Conway PO Drawer 7119 Savannah, GA 31418 Tel: (912)964-8467 Fax: (912)964-2918 Industrial Gas Supply Corp. Trade Debt $825,000 Larry Clayton 1111 Louisiana Street Houston TX 77002 Tel: (713)207-5363 Fax: (713)207-0668 CSR Rinker Trade Debt $767,388 Al Spessard 1501 Belvedere Road West Plm Beach, FL 33406 Tel: (561)820-8446 Fax: (561)820-8425 Unimast Incorporated Trade Debt $750,000 Garen Smith 4825 N. Scott Street Suite 300 Schiller Park, IL 60176 Tel: (847)928-3400 Fax: (847)928-0471 American Gypsum Trade Debt $750,000 Keith Metcalf PO Box 90820 Albuquerque, NM 87199-0820 Tel: (505)823-2022 Fax: (505)528-0468 Boyd Bros. Trade Debt $745,539 Transportation, Inc. Steve Colley 3275 Highway 30 Clayton, AL 36016 Tel: (800)338-2693 Fax: (334)1433 BP Trade Debt $738,920 Greg Stockard 550 West Lake Park Blvd. Houston, TX 77079 Tel: (281)366-4981 Fax: (281)366-4934 Pan Alberta Gas Trade Debt $733,788 Cynthia J. Babiy Suite 600 707 8th Avenue SW Calgary, Alberta Canada T2P 3V3 Tel: (403)218-1050 Fax: (403)218-1501 Marino/Ware Trade Debt $726,776 Angelo Gentile 400 Metuchen Road South Plainfield, NJ 07080 Tel: (908)757-9000 Fax: (908)753-8786 Elk Corporation of America Trade Debt $711,839 Donald Garber 14643 Dallas Parkway Suite 1000 Dallas, TX 75240 Tel: (972)851-0407 Fax: (972)851-0447 United Airlines Trade Debt $700,000 WHQCR Eric Brown UATP Department 1501 Mittel Blvd. Wooddale, IL 60191 Tel: (847)700-1801 Fax: (847)700-1780 Schilli Transportation Trade Debt $660,423 Services, Inc. Tom Schilli 1560 Kepner Drive Lafayette, IN 47905 Tel: (765)448-3400 Fax: (765)448-4888 ----------------------------------------------------------------- [00006] DEBTORS' MOTION FOR JOINT ADMINISTRATION OF PROCEEDINGS ----------------------------------------------------------------- The Debtors ask, pursuant to Rule 1015(b)(4) of the Federal Rules of Bankruptcy Procedure, that the Court order their chapter 11 cases be jointly administered. Administration of one bankruptcy case on the Court's dockets, Daniel J. Defranceschi, Esq., at Richards, Layton & Finger explains, will reduce costs and facilitate a more efficient administrative process, unencumbered by the procedural problems otherwise attendant to the administration of multiple chapter 11 cases. Mr. Defranceschi notes that USG's foreign subsidiaries are excluded from these filings and are not expected to file; they continue pperating with their normal business practices and financial obligations. At the First Day Hearing, Judge Farnan directed that the Debtors' chapter 11 cases be consolidated, solely for administrative purposes, and that all pleadings and papers be captioned: UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE In re: : : Chapter 11 USG CORPORATION, a Delaware : Corporation, et al., : Jointly Administered : Debtors. : Case No. 01-2094 Further, Judge Farnan made it clear that his Order neither contemplates a substantive consolidation of the Debtors' estates or prejudices the right of any party-in-interest to seek a substantive consolidation of the Debtors' estates. ----------------------------------------------------------------- [00006] DEBTORS' MOTION TO HONOR PREPETITION EMPLOYEE OBLIGATIONS ----------------------------------------------------------------- The Debtors sought and obtained authority at a First Day Hearing, in accordance with the Company's stated policies, as such policies may be modified from time to time, and in their sole discretion, to pay: $12,800,000 for certain prepetition employee wages, salaries, contractual compensation, bonuses, sick pay, vacation pay (including personal days), holiday pay, and other accrued compensation and for reimbursements of prepetition employee business expenses; 1,800,000 for amounts for which employee payroll deductions were made for union dues, garnishments, tax levies, support payments, investment programs, benefit plans, insurance programs and the like; 4,120,000 for prepetition contributions to and benefits under employee benefit plans; 710,000 on account of accrued but unpaid disability, life insurance, long-term care and business travel accident insurance premiums; and 280,000 for administrative costs and expenses incident to the foregoing payments and contributions. The Debtors currently employ approximately 12.300 hourly and salaried workers. "The continued and uninterrupted service of these Employees is essential to the Debtors' continuing operations and to their ability to reorganize," David G. Heiman, Esq., at Jones, Day, Reavis & Pogue told Judge Farnan at the First Day Hearing. Mr. Heiman explains that USG filed for chapter 11 protection in the midst of their regular payroll period. Paychecks need to be issued this week. Telling employees to file proofs of claim is not something for which USG management is prepared and management is convinced that the Company's failure to honor the first postpetition payroll would destroy employee morale. Persuaded by these arguments, Judge Farnan granted USG authority to honor these obligations. Judge Farnan makes it clear that nothing in the Debtors' Motion or the Court's Order shall be construed as an assumption of any executory contract pursuant to 11 U.S.C. Sec. 365. *** End of Issue No. 1 ***