By Andrea K. Walker and Paul Adams , SUN REPORTERS|April 08, 2008
W.R. Grace & Co. said yesterday that it has reached a deal that could be worth more than $3 billion to settle thousands of lawsuits by people who say they were sickened by exposure to the company's asbestos products.
The deal potentially clears a path for the Columbia-based chemical maker to emerge by year's end from one of the most complex bankruptcy reorganizations in U.S. history.
The accord, which would depend on approval by a bankruptcy judge in Pittsburgh, would establish a trust fund to pay current and future asbestos claims, which date back decades to when the company produced and sold products containing the substance.
Grace, which employs 6,500 people in 40 countries, sought bankruptcy protection in 2001 after being confronted by thousands of such claims.
"It's a significant recovery, but certainly not enough," said John D. Cooney, an attorney who helped negotiate the deal for victims. "In the final analysis, nothing will really compensate for people who lose their husbands or wives."
Cooney put the value of the settlement at more than $3 billion when cash, stock warrants, insurance payments and other elements are factored in.
Grace executives said they could not put a dollar figure on the deal because the company will make payments over many years.
In a conference call with analysts, Grace Chairman Fred Festa said the agreement allows the company to "once and for all" determine its asbestos liability, which consultants hired by the company and claimants had previously estimated at $385 million to $6.2 billion.
Uncertainty over the lawsuits and restrictions placed on the company in bankruptcy have hampered its growth for years. Grace faced 110,000 claims when it declared bankruptcy.
"It will take all further encumbrances away from us," Festa said in a phone interview yesterday afternoon. "A lot of the things we do have to get court approval. Now we can focus on one thing, and that's making the best products for our customers."
The claims against Grace stem from asbestos in the company's building materials and fire- protection products before 1973. Asbestos is known to cause lung cancer and mesothelioma, a lethal tumor of the lining of the chest and abdominal cavities.
Grace also mined and processed asbestos-containing vermiculite -- a substance used in insulation, potting soil and fertilizer -- in Libby, Mont., for 27 years. Much of the town was contaminated and many of its residents died or became sick with asbestos-related diseases.
