After seven years in bankruptcy proceedings, W.R. Grace & Co. has agreed to settle the asbestos claims against it by contributing up to $1.8 billion to a bankruptcy trust for the benefit of present and future asbestos claimants. Grace will make an initial payment of $250 million. Then, between 2019 and 2034, the company will pay an additional $1.55 billion, guaranteed by 50.1 percent of Grace common stock. If the bankruptcy judge approves the deal, all future asbestos claims against Grace would be resolved through the bankruptcy trust. Grace would have no ongoing liability to its asbestos victims.
In addition, the trust will have the opportunity to buy 10 million shares of Grace stock at $17 a share. With the addition of this equity, the total value of the settlement could be as much as $3 billion.
Grace and six of its former executives remain under criminal charges related to asbestos exposures from its former vermiculite mine near Libby, Montana, where at least 1,200 residents and former mine workers have been injured or killed by asbestos-related diseases like asbestosis and mesothelioma. A conviction could mean a $280 million fine for Grace. Individual defendants face as much as 15 years in prison.
Just last month, Grace to pay $250 million to reimburse federal cleanup costs from Grace sites in Libby, Montana and elsewhere. It was the biggest ever reimbursement payment to the U.S. Superfund program.
For the full story, go to Bloomberg.
