In a recent conference call with insurance industry leaders, W.R. Grace and Company President and CEO Alfred Festa and Senior Vice-president and CFO Bob Tarola announced that the company has reached an agreement to settle personal asbestos injury claims as the corporation emerges from its Chapter 11 “reorganization.” The goals of W.R. Grace and Co. when entering into the bankruptcy process were to (1) determine what their total asbestos liability actually was; (2) fund a trust in that amount so the corporation could move forward unencumbered by the liability, with all asbestos claims made against that trust instead; and (3) turn the agreement into a “reorganization” plan. According to the terms of the agreement, Grace will pay $250 million in cash as well as interest on that amount by the end of 2008. From 2018 until 2023, Grace will make yearly payments of $110 million, then $100 million for another ten years.
According to VP and attorney for Grace Mark Shelnitz, these are fixed payments that the company will be expected to make regardless of any “contingencies.” Company officials stated that the plan has received the endorsement of, among others, the Official Committee of Asbestos Personal Injury Claimants and the Future Claimants’ Representative. In addition, W.R. Grace & Company faces considerable legal fees that will continue; furthermore, Festa, Tarola, and other members of the W.R. Grace board of directors still face criminal charges on the basis that the company knew of the health hazards of asbestos, yet concealed that information from employees. Festa said, however, that they “don’t anticipate that trial starting until ’09 based on where the appeals are right now.” What was most revealing about the entire conversation is that virtually all of it concerned dollars and dollar values. While the leaders of Grace were congratulated by many of the callers on their progress toward bringing the company out of bankruptcy, there was no comment on the impact of Grace’s actions on the health of individuals and communities.