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Heard on the Street: Years into filing for Chapter 11, USG is smiling
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Heard on the Street: Years into filing for Chapter 11, USG is smiling
Wednesday, February 15, 2006
By Karen Richardson, The Wall Street Journal
Just three years ago, Warren Buffett's Berkshire Hathaway Inc.
was lending its shares of USG Corp.
to short sellers, who were betting the $4 stock of the building-materials company, under bankruptcy-court protection, had further to fall.
Two weeks ago, USG shares traded as high as $99.30, more than triple their price in mid-2001, when USG filed for Chapter 11 protection for the second time in a decade - this time to fend off lawsuits from people who claimed they were exposed to asbestos, a cancer-causing fire retardant that USG used in some products until the 1970s.
One securities analyst thinks the stock will keep climbing, and USG has even announced a plan to sell new stock to existing shareholders.
It is a remarkable comeback for the 104-year-old company - and an unprecedented recovery for the stock of a company that is still doing business under protection from creditors.
"It's the most successful managerial performance in bankruptcy that I've ever seen," Mr.
Buffett says.
Berkshire still owns about 15 percent of USG, the same stake it held when Mr.
Buffett was lending ou...
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