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ARTICLE · 22 SEPTEMBER 2005

Lessons on Substantive Consolidation: Third Circuit Reverses Order Substantively Consolidating Owens Corning

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On August 15, 2005, a panel of the United States Court of Appeals for the Third Circuit reversed an Order of the Delaware District Court substantively consolidating Owens Corning with several of its various subsidiaries.

United StatesLitigation, Mediation & Arbitration
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Originally published September 19, 2005

On August 15, 2005, a panel of the United States Court of Appeals for the Third Circuit reversed an Order of the Delaware District Court substantively consolidating Owens Corning with several of its various subsidiaries. In re Owens Corning, Docket No. 04-4080, 2005 U.S. App. LEXIS 17150 (3d Cir. 2005), reversing In re Owens Corning, 316 B.R.168 (D. De. 2004). The panel's opinion is significant because it is the Circuit Court's first opinion on substantive consolidation under the Bankruptcy Code enacted in 1978, and the panel went to great lengths to set forth certain boundaries and policy considerations that practitioners should keep in mind when applying the extreme, last-resort remedy of substantive consolidation.

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