Owens-Illinois to continue efforts to have noteholder suit dismissed

New York, Jan. 15 - Owens-Illinois, Inc. said it will continue its efforts to have a noteholder suit dismissed, despite an adverse ruling by the Supreme Court of the State of New York.

The Toledo, Ohio glass container company said it will appeal the court's denial of its motion to dismiss an action brought by Murray Capital Management, Inc.

Owens-Illinois said it believes Murray Capital's claims are without merit.

The company said that investment firm Murray Capital is suing Owens-Illinois and an affiliate of one of the lead lenders under its bank credit facility, Deutsche Bank AG. In early 2001, Murray bought $4.5 million of Owens-Illinois' 7.85 % senior notes due 2004 and 8.10% senior notes due 2007.

According to Owens-Illinois, Murray Capital is disputing a refinancing of Owens-Illinois' credit facility on a secured basis in April 2001.

Murray Capital claims, among other things, that Owens-Illinois' subsidiaries cannot grant security interests to the lenders under the restructured credit facility without securing the $1.7 billion of outstanding public debt securities of Owens-Illinois on an equal and ratable basis, Owens-Illinois said.

Owens-Illinois said it believes it is allowed to do so; in June 2001 it secured its $1.7 billion of its public debt securities on a second priority basis with a portion of the collateral securing the obligations under the secured credit agreement and had two of its principal subsidiaries guarantee those debt securities on a subordinated basis.

Murray Capital could not be reached for comment.

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