Grace agreed last month to pay $250 million to remove contamination in Libby -- the largest cleanup settlement in the history of the federal government's Superfund program.
Grace said yesterday that it will take on a maximum of $1.5 billion in debt to emerge from bankruptcy and will seek a revolving loan of an undetermined amount.
Grace still has to settle cases dealing with attic insulation and property damage, but Festa said those should not affect the timetable to emerge from bankruptcy.
"The big nut was the personal injury claims when we declared bankruptcy, so this was a big one to get off of our docket," he said.
The settlement calls for Grace to make an upfront cash payment of $250 million to the trust. The company will then make annual payments totaling $1.55 billion from 2019 to 2034. Grace will put 50.1 percent of its common stock up as collateral to guarantee the payments.
The trust fund will also get proceeds from insurance that Grace had in place to cover asbestos claims. The company said yesterday that it has $917 million worth of coverage through solvent insurance carriers and $250 million through carriers that are undergoing some form of reorganization.
The trust fund also gets warrants to buy up to 10 million Grace shares for $17 a share -- well below yesterday's closing price of $26.83.
The fund will get about $1.2 billion more in assets from previous settlements with Sealed Air Corp. and Fresenius Medical Care Holdings Inc. Those companies purchased two former Grace business units just before the chemical maker's bankruptcy filing. Lawyers for asbestos claimants said the asset sales were fraudulent, arguing that Grace sold the units to shield itself from asbestos claims.
To get a piece of the settlement, claimants will have to apply to the trust fund. A panel will determine if the claim qualifies and then seek to determine an award amount, said Cooney, the victims' lawyer. The amount a victim receives will depend on such factors as age and severity of the illness.
"You'll have the right to recover a whole range of values depending on how you were personally impacted," Cooney said.
Under the settlement, Grace will be shielded from further personal injury lawsuits. Victims could sue the trust only if they are not happy with a settlement.
"This settles everything," Festa said. "They cannot sue Grace for any further asbestos liabilities in the future. They would have to go through the trust and say they were not being treated fairly."
