W.R. Grace & Co. announced in mid-September that it had filed a Plan of Reorganization for the company with the U.S. Bankruptcy Court in Delaware. According to Grace Chairman, President and CEO Fred Festa, the filing was a step toward resolving the company’s asbestos-related liabilities and exiting its Chapter 11 bankruptcy status. A hearing on the company’s Disclosure Statement was set to begin this week.
As we have posted on this site many times before, W.R. Grace operated a vermiculite mine and processing plant in and near Libby, Montana, from 1963 to 1990. The vermiculite was contaminated with high levels of asbestos, which affected the health of mine workers and just about everyone who lived in the town. Gravel and other scrap rock from the mine was scattered throughout the town of Libby, used in construction of a running track at the school, lining flowerbeds, and underfoot on ballfields.
Hundreds of Libby residents have died of mesothelioma and other asbestos-related illnesses as a result of their widespread exposure to the asbestos materials, and even more are sick with asbestos disease. In March, Grace agreed to pay $250 million toward government cleanup efforts in the town of Libby. It is estimated that the Environmental Protection Agency has spent at least $168 million so far in removing asbestos-contaminated soils and other materials from the Libby area.
Reaching beyond Libby, which has been basically killed by asbestos, the vermiculite insulation that was manufactured by Grace is still a danger in thousands of homes, where it was used for years. Grace is currently accepting claims from homeowners who have the company’s Zonolite Attic Insulation (ZAI) in their homes, for reimbursement of asbestos abatement costs and other economic loss and property devaluation related to the presence of the asbestos-laden material. This action, which centers exclusively on property-related damages, doesn’t even touch the potential health hazard of having the substance in one’s home.*
While Grace sorts out its bankruptcy issues, the Baltimore Business Journal reported on Oct. 23 that the company has seen record profits in 2008, experiencing nearly 50 percent growth in its third-quarter earnings. The Journal reports the Columbia-based Grace (NYSE: GRA) enjoyed a 14 percent increase in sales since last year, with revenues topping $800 million. The report says, “Grace’s pre-tax income from core operations, which factors out costs related to the company’s Chapter 11 bankruptcy, rose 6 percent to $82 million.”
The story quotes Grace Chief Financial Officer Hudson La Force as saying, “What’s really important is the condition of the financial markets in the middle of next year. We’re very focused on making sure when the time comes to make our exit, we have the financing in place to do that.”
*PLEASE NOTE: TO LEARN MORE ABOUT FILING A ZAI CLAIM, PLEASE VISIT THE GRACE BANKRUPTCY CLAIMS INFORMATION SITE at www.graceclaims.com to download the forms necessary to file your claim. Deadline to file is OCTOBER 31, 2008.