Asbestos Deal Dead After Discussion

Article Added August 4th, 2006 - Print This Story - Bookmark This Story

Discussions for a deal between W.R. Grace & Co. and asbestos creditors failed this week. Bankruptcy lawyers said that negotiations had stopped when no incentive was offered for shareholders.

After asbestos-claim lawyers told chemical company W.R.Grace and Co. that no provisions would be given to shareholders in a bankruptcy deal, the company decided to end further discussions. The Maryland based company declared Chapter 11 in 2001 in response to litigation involving their products, which contain asbestos. Bankruptcy lawyers were introduced in an attempt to settle the case between W.R.Grace and lawyers representing plaintiffs.

The company had requested to settle the claims of asbestos victims without touching money from their shareholders. Lawyers for the asbestos creditors noted that mediation was not successful after it was stated that the shareholder would not be excluded from any settlement. Victims and their lawyers are worried that the company will not be able to withhold shareholders’ assets while covering debts to creditors. Negotiations may resume in the future after W.R.Grace has analyzed an estimate of their liabilities, but are indefinitely postponed at this time. A recent plea of not guilty was submitted for the company and some of its executives regarding criminal charges stemming from a mining operation in Libby, Montana.

Article Added August 4th, 2006 - Print This Story - Bookmark This Story