[Weil, Gotshal & Manges LLP Letterhead]
January 31, 2005
Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Attn: Ms. Pamela A. Long
RE: BUILDING MATERIALS CORPORATION OF AMERICA
REGISTRATION STATEMENT ON FORM S-4
FILE NO. 333-119608
Dear Ms. Long:
On behalf of our clients, Building Materials Corporation of
America and the additional registrants of the Registration Statement (as defined
below) (collectively, the "Company"), we are transmitting herewith via the EDGAR
system for filing with the Commission Amendment No. 2 (the "Amendment") to the
Registration Statement on Form S-4 (the "Registration Statement") of the Company
(File No. 333-119608, together with exhibits thereto).
Set forth below in bold are each of the comments in the
Staff's letter of December 17, 2004. Immediately following each of the Staff's
comment is the Company's response to that comment, including where applicable, a
cross-reference to the location of changes made in response to the Staff's
comment. For your convenience, each of the numbered paragraphs below corresponds
to the numbered comment in the Staff's comment letter and includes the caption
used in the comment letter.
GENERAL
1. WE NOTE YOUR RESPONSE TO PRIOR COMMENT 4. SINCE GAF FIBERGLASS
IS NOT AN ADDITIONAL REGISTRANT, PLEASE WITHDRAW THE
REGISTRATION STATEMENT FOR THIS SUBSIDIARY ONLY. PLEASE
CONTACT THE EDGAR FILE SUPPORT OFFICE (202-942-8900) IF YOU
HAVE ANY QUESTIONS.
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January 31, 2005
Page 2
GAF Fiberglass Corporation has filed a request to withdraw the
Registration Statement.
PROSPECTUS SUMMARY, PAGES 1-5
2. WE REISSUE PRIOR COMMENT 12. IN THE SUMMARY, YOU ARE TO
CAREFULLY CONSIDER AND IDENTIFY THOSE ASPECTS OF THE OFFERING
THAT ARE THE MOST SIGNIFICANT AND DETERMINE HOW TO BEST
HIGHLIGHT THOSE POINTS IN CLEAR, PLAIN LANGUAGE. THE SUMMARY
SHOULD NOT INCLUDE LENGTHY DESCRIPTIONS OF YOUR INDUSTRY,
COMPETITIVE STRENGTHS, AND BUSINESS STRATEGIES. PLEASE REVISE.
IF YOU WANT TO HIGHLIGHT KEY ASPECTS OF YOUR BUSINESS,
CONSIDER LISTING THESE IN A BULLET-POINT FORMAT, WITH ONE
SENTENCE PER BULLET POINT, AND BALANCE THIS INFORMATION WITH
APPROPRIATE RISK FACTOR DISCLOSURE. SEE ITEM 503(A) OF
REGULATION S-K AND PART IV.C OF RELEASE NO. 33-7497.
The Company has complied with the Staff's comment by deleting
the disclosure on Industry, Competitive Strengths and Business
Strategies from the Summary and moving that disclosure to the
Business section. See pages 2, 53, 54, 55 and 56.
RISK FACTORS, PAGES 17-24
3. WE REISSUE PRIOR COMMENT 15. PLEASE ALSO AVOID LANGUAGE IN
RISK FACTORS LIKE "DETRIMENTALLY AFFECT" OR "SIGNIFICANT
DETRIMENTAL EFFECT."
The Company has complied with the Staff's comment by revising
all of the references to "detrimentally affect," "significant
detrimental effect," "adversely affect," "materially affect"
or "material adverse effect" to more precisely set forth the
impact of the appropriate risk. See pages 15, 18, 19 and 20.
4. WE REISSUE PRIOR COMMENT 16.
The Company has complied with the Staff's comment by deleting
all of the references to "there can be no assurance" or "we
cannot assure" and inserting more appropriate language. See
pages 14, 15, 19 and 20.
WE MAY BE FORCED TO CONTRIBUTE ASSETS. . . .PAGE 17
5. WE REISSUE PRIOR COMMENT 18.
The Company has complied with the Staff's comment by revising
the requested disclosure to indicate that claimants generally
have not sought a specific amount of damages. See page 15. The
Company continues to believe that attempting to
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January 31, 2005
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identify the damages sought in those complaints that specified
damages is unnecessary and potentially misleading disclosure.
The Company notes that prior to the G-I Holdings bankruptcy
case that was filed in 2001 (and effectively enjoined all
asbestos cases), there were approximately 171,000
asbestos-related cases and most of the complaints did not seek
a specific amount of damages. The Company did not track the
damages sought in those complaints because it did not, and
does not believe the amount of damages sought in those cases
was relevant to the liability that it could incur if it is
ultimately determined to have asbestos liability. As we have
disclosed in the risk factor on page 15, if the Company is
held liable for the asbestos liability of G-I Holdings, it
would divert a material amount of its cash flow to attempt to
satisfy those claims and the Company may not be able to pay
the principal and interest on the notes. We believe that this
disclosure is the disclosure that is material to investors
instead of trying to identify the amount of damages sought in
the complaints that identified a damage amount.
MD&A - LIQUIDITY AND FINANCIAL CONDITION, PAGES 44-47
6. WE NOTE YOUR RESPONSE TO PRIOR COMMENTS 31 AND 32. WE ALSO
NOTE THAT YOU HAVE NEGATIVE CASH FLOWS FROM OPERATIONS FOR THE
NINE MONTHS ENDED OCTOBER 3, 2004 AND SEPTEMBER 28, 2003.
PLEASE CLARIFY IF YOU INTEND TO RELY ON EXTERNAL FINANCING AND
CASH ON HAND IN ORDER TO MEET YOUR CASH REQUIREMENTS AND
MAINTAIN OPERATIONS OVER THE SHORT AND LONG TERM. ALSO PROVIDE
YOUR ASSESSMENT OF WHETHER THIS FINANCING WILL CONTINUE TO BE
AVAILABLE, AND ON WHAT TERMS.
The Company has complied with the Staff's comment by adding
the requested disclosure. See page 41.
LEGAL PROCEEDINGS, PAGE 60
7. WE REISSUE PRIOR COMMENT 40. QUANTIFY THE DAMAGES SOUGHT IN
THE COMPLAINTS THAT DO PROVIDE SUCH SPECIFIC INFORMATION.
The Company has complied with the Staff's comment by revising
the requested disclosure to indicate that most complaints do
not seek a specific amount of damages. See pages 60 to 63.
Please see our response to Comment 5 above, which is also
applicable to this Comment. We have also added to the
disclosure of the asbestos proceedings on page 60 the language
from the risk factor on page 15 regarding the consequences to
the Company if the Company is ultimately determined to be
responsible for G-I Holdings asbestos liability.
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January 31, 2005
Page 4
EXHIBITS
8. IN EXHIBIT 5.1, WHERE COUNSEL REFERS TO THE CORPORATE LAWS OF
THE STATE OF DELAWARE, COUNSEL SHOULD CONFIRM SUPPLEMENTALLY
THAT IT DOES NOT INTEND TO EXCLUDE THE DELAWARE CONSTITUTION
AND REPORTED JUDICIAL DECISIONS INTERPRETING THESE LAWS.
COUNSEL SHOULD FILE THIS CORRESPONDENCE ON EDGAR, AS IT WILL
BE A PART OF THE COMMISSION'S OFFICIAL FILE REGARDING THIS
REGISTRATION STATEMENT. SEE SECTION VII.A.14 OF OUR NOVEMBER
14, 2000 CURRENT ISSUES OUTLINE.
We supplementally confirm that where we refer to the corporate
laws of the State of Delaware in the Exhibit 5.1 opinion, we
do not intend to exclude the Delaware Constitution and
reported judicial decisions interpreting its laws.
9. WE NOTE YOUR RESPONSE TO PRIOR COMMENT NUMBER 50. IT APPEARS
THAT THE LONG-TERM REQUIREMENTS CONTRACT WITH ISP IS WITH AN
AFFILIATE AND SHOULD BE FILED PURSUANT TO ITEM
601(b)(10)(II)(A).
The Company disagrees with the Staff's position that its
supply agreement with ISP Minerals Inc. is required to be
filed pursuant to Item 601(b)(10)(ii)(A) of Regulation S-K.
Item 601(b)(10)(ii)(A) provides for the filing of a material
". . . contract to which directors, officers, promoters,
voting trustees, security holders named in the registration
statement or report, or underwriters are parties other than
contracts involving only the purchase or sale of current
assets having a determinable market price, at such market
price." ISP is an affiliate of the Company, and Item
601(b)(10)(ii)(A) does not use the term "affiliates" in its
description of material contracts that need to be filed. The
rule uses the term "security holders." "Affiliates" and
"security holders" are not synonymous and are distinguished
from one another in several instances in the securities laws.
For example, Rule 144(a)(1) defines "affiliate of an issuer"
as a "person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under
common control with, such issuer." Rule 144 sets forth
additional restrictions on the sale of securities under
certain circumstances by affiliates versus such sales by
ordinary security holders, and although the Company and ISP
are affiliates, ISP is not a security holder of the Company.
Furthermore, Mr. Heyman is not an officer or director of ISP
Minerals Inc. or the Company, which are the actual parties to
the supply agreement. In fact, the Company and ISP Minerals
Inc. are separate entities, having separate management,
separate boards of directors, sales staff, payroll systems,
benefit plans and the like. The only nexus for the Company and
ISP Minerals Inc. as affiliates is that ISP, which is the
parent of ISP Minerals Inc., and the Company are each
beneficially owned, as defined in Rule 13d-3, by Mr. Heyman.
Otherwise, there is no relationship between the two companies.
As a result, the Company does not believe that the supply
agreement is required to be filed.
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January 31, 2005
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The legislative history of Item 601 also supports a
distinction between affiliates and security holders.
Regulation S-K was created to serve as a single, uniform
source of disclosure requirements for all registration forms
under the 1933 Act and periodic reports and registration
statements under the 1934 Act. The provisions of clauses
(ii)(A) and (ii)(B) of Item 601(b)(10) have their genesis in
and are identical in substance (albeit not in form) to the
language of the corresponding Form S-1 exhibit filing
requirement adopted in 1955 as part of an overall revision of
all of the then existing exhibit requirements. SEE SEC Release
No. 33-3540, dated April 27, 1955 (proposing these revisions).
The language that pre-dated and was superseded by the 1955
revision (and is set forth in SEC Release No. 33-3406, dated
January 25, 1951), stated that:
If the contract is such as ordinarily accompanies the
kind of business conducted by the registrant and its
subsidiaries, it is made in the ordinary course of
business unless the amount involved in the contract
in proportion to the total assets and volume of
business of the registrant and its subsidiaries, the
duration of the contract and the party with whom
contracted, are such as to make it of an
extraordinary nature. Without limiting the generality
of the foregoing, the following contracts made with
parties other than voting trustees, directors,
officers, promoters, underwriters, principal holders
of equity securities or AFFILIATES [emphasis added]
are deemed to have been made in the ordinary course
of business and need not be filed.
Thus, the 1951 Release included the requirement to file
ordinary course contracts with affiliates. Four years later,
however, in SEC Release 33-3540 (Apr. 27, 1955), the
requirement with respect to affiliates was removed. The
language of Release 33-3540 mirrors what is currently Item
601(b)(10)(ii)(A) and does NOT include the requirement to file
ordinary course affiliate contracts. Accordingly, the Company
believes the term "affiliates" was intentionally omitted from
the rule and ordinary course affiliate contracts need not be
filed.
In addition, it is worth noting that both the Company and ISP
have undergone several SEC Staff reviews since 1994 and have
never been required to file the ISP supply agreement. For
example, ISP was reviewed in 2000 where ISP's treatment
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January 31, 2005
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of the supply agreement was accepted. The Company was most
recently reviewed in 2001. Accordingly, we reiterate our
previous response to Comment 50 that, although the supply
agreement may be material to the Company, it is a contract
made in the ordinary course of business, and the Company does
not believe that any provision of Item 601 would require it to
be filed.
ACCOUNTING COMMENTS TO FORM 10-K FYE 2003
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CASH AND CASH EQUIVALENTS
10. PLEASE TELL US HOW THE DEBT SECURITIES PURCHASED WITH ORIGINAL
MATURITIES OF SIX MONTHS OR LESS QUALIFY AS CASH EQUIVALENTS
UNDER SFAS 95 PARAGRAPH 8.
The Company acknowledges the Staff's comment and will modify
the disclosure in future periodic reports, as discussed with
John Cash of the Division of Corporate Finance on January 4,
2005.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - PROPERTY, PLANT AND
EQUIPMENT
11. WE NOTE THAT DEPRECIATION IS COMPUTED "PRINCIPALLY" ON THE
STRAIGHT-LINE METHOD. PLEASE TELL US SUPPLEMENTALLY AND
DISCLOSE IN FUTURE FILINGS WHAT OTHER DEPRECIATION METHODS ARE
USED FOR EACH MAJOR CLASS OR DEPRECIABLE ASSETS.
The Company acknowledges the Staff's comment and will modify
the disclosure in future periodic reports, as discussed with
John Cash of the Division of Corporate Finance on January 4,
2005.
We would very much appreciate receiving the Staff's comments,
if any, with respect to Amendment No. 2 to the Registration Statement on Form
S-4 as promptly as practicable. If it would expedite the review of the materials
filed herewith, please do not hesitate to call the undersigned at (212)
310-8000.
Sincerely yours,
/s/ Michael Lubowitz
----------------------
Michael Lubowitz