Paul J. Norris, who presided over W.R. Grace & Co.'s move from Florida to Maryland and steered it into bankruptcy protection in the face of thousands of asbestos-injury lawsuits, will step down as chief executive of the maker of chemicals and building materials in May, the company announced yesterday.
He will be succeeded by Fred Festa, 45, who joined Grace last year as president and chief operating officer. Norris will remain on the board of directors as non-executive chairman, focusing on the company's bankruptcy reorganization.
The Columbia-based chemical company, which has 1,200 employees in Maryland, filed a reorganization plan last Saturday that seeks to limit its liability in more than 325,000 asbestos lawsuits to $1.61 billion.
The company, which sold asbestos-containing fire-protection products before 1973, is one of dozens that have filed for bankruptcy protection after being sued by people who contracted cancer or other lung ailments after inhaling asbestos fibers.
"I believe that this is the appropriate time to complete the transition of responsibilities from me to Fred that we started a year ago," Norris said in a statement released after the close of markets. "The businesses are in very good shape, our plan of reorganization is before the bankruptcy court, and Fred has done a great job as chief operating officer building credibility with all of our stakeholders."
The company declined to make Festa or Norris available for interviews.
Grace's shares closed unchanged at $12.80 in trading yesterday on the New York Stock Exchange.
The lawsuits and the financial burden that resulted cast a shadow over Norris' approximately six years as chief executive.
Norris, 57, joined the company in 1998 after leaving AlliedSignal Inc., where he was senior vice president of the company's $1.6 billion chemicals business. His youth and experience were seen as a signal that Grace was ready to expand its specialty chemical business after having spun off more than 30 businesses in the late 1990s.
Struggling to cope with potentially billions of dollars in asbestos liabilities, Norris took the company into Chapter 11 in 2001. The move was widely anticipated after Owens Corning, Armstrong World Industries Inc., Babcock & Wilcox and several other companies facing asbestos claims sought bankruptcy protection.
Grace filed a reorganization plan after numerous delays during which the company continued to negotiate with creditors. In the plan, the company said it would set up a trust to pay asbestos claims. It also laid out plans to deal with $1.2 billion in bank debt, environmental liabilities, trade payables, pension claims and tax liabilities.
Festa previously was a partner with Morgenthaler Private Equity. He remains an outside director of Formed Fiber Technologies, in which Morgenthaler is a principal shareholder.
