Proposed $19.5M Asbestos Settlement in Libby, Montana W.R. Grace Case

Interested parties have proposed a $19.5 million settlement in the bankruptcy case of W.R. Grace and Co. in Montana earlier this week.  The huge settlement is designed to help pay for medical expenses of victims of W.R. Grace’s mining operation in Libby, Montana which exposed thousands of people both within the town as well as worldwide to harmful levels of asbestos and has caused near-countless illnesses and hundreds of deaths already.  The money would be deposited into a trust from which payments would then be made to offset the crushing financial burden associated with mesothelioma, asbestosis, and other asbestos diseases. 

An attorney for the Libby victims said that the settlement would be necessary to ensure that W.R. Grace could not eliminate the Libby Medical Plan Trust if and when bankruptcy proceedings were finalized.  The Libby Medical Program was created in 2000 after the scope of the health disaster caused by the vermiculite mine in Northwestern Montana was first realized.  However, as the trust is structured now, W.R. Grace is not legally obligated to continue funding it – the whole thing is completely voluntary. 

If the company were allowed to stop funding the trust it would be disastrous to the victims and families currently suffering from mesothelioma, lung cancer, and other related disease and to those yet to be diagnosed. 

Mesothelioma is especially costly as the disease disables victims before eventually killing them and treatment for mesothelioma can run into the hundreds of thousands of dollars.

In addition to the intended $19.5 million trust, those injured by W.R. Grace’s mishandling of asbestos tainted vermiculite can also continue to receive distributions from the separate Asbestos Personal Injury Trust (outlined in the settlement but yet to be established) if they meet eligibility requirements.

For its part, W.R. Grace has rightly taken a great deal of responsibility and has, after initial backsliding, acted quite proactively, agreeing that some sort of permanent agreement must be made.  In a company statement, Grace said that the $19.5 million would come from cash holdings, insurance, stock, and payments from third parties.

The settlement and the company’s controversial reorganization plan have been approved by the U.S. District Bankruptcy Court of Delaware but are still subject to appeal.  

However, W.R. Grace is not the only organization in the hot seat concerning the asbestos threat from Libby.  Late last year a Montana judge approved a $43 million settlement in a case that pitted 1,128 asbestos victims against the state.  The claimants alleged that certain state officials had knowledge of and facts which proved the dust from the mine was responsible for multiple deaths and hundreds of asbestos disease diagnoses and not only did nothing but failed to inform the public of the danger.

More than 200 lawsuits against various state agencies had been filed resulting in the $43 million award.  Defense attorneys for the state claimed that the agencies and officials had no legal obligation to provide warnings.

Current estimates place the number of known deaths directly related to the vermiculite mining operation in Libby at 400.  In addition to the deaths, the Center for Asbestos Related Diseases in Libby has over 2,800 patients dealing with illnesses caused by the careless actions of W.R. Grace officials and negligent Montana government agencies. 

That number may sound large but it is likely to grow.  Asbestos illnesses related to the dust that spread over the entire town and along the rail lines on which the vermiculite was shipped are still popping up.  That’s because many of these asbestos diseases, including mesothelioma, have extremely long latency periods from 10 to up to 50 years after exposure.