Arbitration & Mediation

Settlement of the Month: W.R. Grace Tentatively Settles Asbestos Claims

By Victoria Pynchon

The Baltimore Business Journal announced today the W.R. Grace & Co. tentative $2B settlement on asbestos claims here. 

W.R. Grace & Co. Inc. has reached a proposed settlement of all current and future asbestos-related personal injury claims against the company -- a huge step toward Grace's goal of emerging from bankruptcy reorganization.

Columbia-based chemicals giant Grace (NYSE: GRA) filed Chapter 11 bankruptcy in 2001, facing huge liabilities related to asbestos. The company said Monday that it has reached the tentative settlement with a committee of asbestos personal injury claimants, a representative handling future claims and a committee of Grace stockholders.

The complex settlement would total more than $2 billion and would include:

• $250 million in cash;
• Deferred payments of $110 million per year for five years beginning in 2019, and $100 million per year for 10 years beginning in 2024. The deferred payments would be backed by just over half of Grace's common stock;
• Warrants to buy 10 million shares of Grace common stock at an exercise price of $17 per share. The warrants would expire a year after Grace's reorganization plan takes effect. Grace shares were trading at $26.78 late Monday morning, up 8 percent;
• Rights to proceeds of Grace's asbestos-related insurance coverage;
• The value of cash and stock under settlements of litigation with Sealed Air Corp. and Fresenius Medical Care Holdings.

For the complete article, click here.

Full post as published by Settle It Now Negotiation Blog on April 07, 2008 (boomark / email).