W.R. Grace and Company, Still Under Siege, Makes Deal

Recently, we reported that W.R. Grace and Company–the corporation responsible for the deaths of hundreds of people in Libby , Montana –agreed to pay a mere $250 million “… for the investigation and cleanup of asbestos contamination around Libby , Montana .” That figure represented only about 16% of its total net worth, which has been reported to be in the neighborhood of $1.5 billion. The company, which now reports 2007 revenues of $3.1 billion from the sale of “specialty chemicals” and miscellaneous construction products, may ultimately be on the hook for 99% of that figure. Earlier this month, under the current “reorganization” plan under Chapter 11, Grace and Co. agreed to provide up to $3 billion to asbestos claimants over the next twenty-five years. This money will be paid into a trust fund set up specifically for the purpose of resolving present and future claims. Over half of the amount–$1.8 billion–will be paid in annual installments. After an initial payment of $250 million, the company will pay into the trust fund for fifteen years. Annual payments will be $110 million per year between 2019 and 2024, then drop to $100 million per year until 2034.

The rest will be paid in the form of stocks, cash, and proceeds from insurance settlements. This is the third reorganization the company has filed since 2004; the first two were opposed by plaintiffs’ committees, two of which offered alternate plans. These, however have yet to be approved by the courts. It is ironic that, in light of the fact that corporations claim human rights under a twisted and inaccurate interpretation of the Fourteenth Amendment of the Constitution, W.R. Grace is being allowed to continue to exist at all. Any human defendant who had showed such depraved indifference to the lives and rights of others would be facing life sentences–and in some states, even the death penalty. Nonetheless, Grace CEO Fred Festa, who despite everything continues to draw annual compensation of well over $2 million, expressed optimism: ” A lot of work remains to be done before we can confirm a plan of reorganization, but I am optimistic we will be successful in reaching that goal by the end of this year or early in 2009,” he told reporters. That remains to be seen; W.R. Grace and Company still faces criminal charges on the grounds that management knowingly allowed workers to be exposed to the asbestos fibers, resulting in the asbestos-related deaths of at least 225 people and the illnesses of several hundred more.