Apr 20, 2008 - W.R. GRACE AGREES TO EXIT BANKRUPTCY PROTECTION
For many decades, W.R. Grace manufactured and sold a fire-retardant asbestos material that causes mesothelioma and lung cancer. Grace filed for bankruptcy in 2001, to avoid paying lawsuits filed by people who were sickened by exposure to asbestos. The filing put the asbestos victims claims on hold. Grace has now agreed to settle the outstanding asbestos-related claims with cash, future payments to a victims' trust and 10 million warrants that would allow claimants to buy company stock at a favorable price. The deal is worth about $1.8 billion. It would allow W.R. Grace to emerge by the end of the year after seven years of bankruptcy protection.
If U.S. Bankruptcy Judge Judith Fitzgerald approves the plan, W.R. Grace would immediately pay $250 million into a trust for the victims. Beginning in 2019, it would pay $110 million annually for five years to the trust, and then $100 million per year for 10 years beginning in 2024. Under the agreement, plaintiffs would be eligible to buy 10 million shares of Grace common stock for $17 per share for one year after the company's reorganization. Some asbestos attorneys have said the plan is fair to asbestos victims.
Jack K Clapper
Clapper, Patti, Schweizer & Mason
415-332-4262
800-440-4262
jkc@clapperlaw.com
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