An appeals court in Philadelphia refused to disqualify a judge in the Owens Corning bankruptcy case who is accused of having a conflict of interest.
Instead, the U.S. Court of Appeals for the 3rd Circuit instructed U.S. District Judge Alfred Wolin, of Newark, N.J., to listen to evidence and decide whether he should recuse himself from Chapter 11 cases of OC and four other former asbestos producers.
He was ordered to make a decision by Jan. 31.
While the development will mean a one-month delay in OC s more than three-year bankruptcy proceedings, officials of the Toledo Fortune 500 company praised the appeals court s decision.
“We absolutely believe this is the appropriate decision,” said spokesman David Dimmer. “Any disruption from this decision will be minimal.”
Lawyers for Owens Corning argued last week at a hearing on the issue that removing Judge Wolin would push back the company s reorganization plan by at least a year.
In referring the case back to Judge Wolin, the appeals court said, “He has been intimately involved in these proceedings,” and is in “the best position to understand the implications of those matters alleged ... in the motions.”
The court said it didn t have enough information to support removal of the judge, but indicated it would review his eventual decision on the matter.
His removal is being sought by OC creditors Kensington Limited and Springfield Associates LLC, which hold $275 million of the firm s debt. They argued that the judge may be biased in favor of asbestos claimants in the case because he hired two consultants who have represented such claimants in other bankruptcies.