April 8, 2008 in Business

Grace resolves asbestos claims

From Staff and Wire Reports The Spokesman-Review
 

W.R. Grace & Co. said Monday it has reached an agreement to resolve all current and future asbestos claims against the company, which would allow it to emerge from bankruptcy without further obligations for asbestos injury.

Attorneys for the plaintiffs value the agreement at $3 billion in cash and equity.

Claims against the chemical company include workers and residents who say they were harmed by asbestos from Grace’s Libby, Mont., vermiculite mine. More than 1,200 residents or former mineworkers have died or claimed injury because of the mining operations there.

Lawyers for asbestos claimants say the Montana operation produced a particularly toxic form of asbestos, one far more likely to result in serious injury than regular asbestos.

Monday’s announcement came less than a month after Grace announced it would reimburse the federal government $250 million for the investigation and cleanup of asbestos contamination in Libby.

The agreement calls for the company to pay $250 million in cash into a trust fund for asbestos victims, followed by deferred payments of $110 million per year for five years beginning in 2019 and $100 million per year for 10 years beginning in 2024.

The company also said it agreed to issue warrants to acquire 10 million shares of common stock at $17 per share.

“The victims of asbestos poisoning and asbestos cancer have walked a long path to reach justice,” said John D. Cooney of the Chicago law firm of Cooney and Conway, a member of the negotiating committee for the settlement. “Certainly nothing can replace the family members who have been lost as a result of their exposure to asbestos, but today’s settlement represents a fair resolution for both the victims and Grace.”

At the time Grace filed for bankruptcy protection in April 2001, Grace stated that it had been named in 325,000 asbestos personal injury claims. Cooney, whose law firm represents asbestos plaintiffs, noted that many individuals have been diagnosed with asbestos disease since then.

From 1963 until the early 1990s, Grace mined and processed vermiculite ore on a mountain 6 miles outside Libby. Clouds of vermiculite, which contained tiny shards of dangerous asbestos, were inhaled by the miners and brought home to their families in their clothes.

The health crisis that followed didn’t become national news until 1999 when the Seattle Post-Intelligencer reported that hundreds of vermiculite miners and their family members had died and thousands more had become ill. The U.S. Environmental Protection Agency immediately launched an emergency cleanup.

Internal W.R. Grace documents produced through legal discovery show that company officials knew the ore was extremely dangerous but failed to warn their workers.

Shares of W.R. Grace closed Monday at $26.83, up $1.98, or nearly 8 percent.


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