No Deal between W.R. Grace and its Asbestos Creditors

July 25, 2006 - The Associated Press has reported that an attempt to broker a deal between W.R. Grace Company and its asbestos creditors has failed.  Bankruptcy lawyers for the company reported on Monday that they had decided not to negotiate further with asbestos-claim lawyers as they were offering nothing for shareholders.

The article reports that, earlier this year, U.S. Bankruptcy Judge Judith Fitzgerald appointed a mediator to attempt to settle differences between W.R. Grace and lawyers for people with asbestos-related diseases and property damage. The mediator was unsuccessful as well.

The company, which has been in the news due to the upcoming trial of seven of its executives accused of cover-ups at its Libby, Montana vermiculite mine, declared bankruptcy in 2001 in an effort to resolve its liabilities stemming from asbestos-containing products.

Grace spokespersons have made it known that they would like to settle claims with those with asbestos-related diseases or damage without “taking value out of the hands of its shareholders.”

The company’s critics don’t believe that’s possible.  The AP article stresses that lawyers for the hundreds of individuals with asbestos claims say the company is probably not worth enough at this point to cover debts to creditors and still leave something for shareholders.