W.R Grace is betting that a bankruptcy judge will set it’s liability at a level that will allow it to come out of bankruptcy. We’ll see. W.R Grace is in bankruptcy court right now and the court needs to determine how much it has to pay to cover it’s liability to injured people. (People with asbestos related diseases, such as lung cancer and mesothelioma and asbestosis). According to the article if the judge decides that it must set aside $700 Million give or take, then the company will be able to get out of bankruptcy. If the number is higher, and experts for the asbestos claimants say that the liability could be as high at $3.7 Billion, then the company will likely be “owned” by the injured parties.
PHILADELPHIA –
W.R. Grace & Co. is getting ready to gamble the company on the decision of a lone bankruptcy judge who will take up a question that would otherwise be in the hands of an army of judges and jurors.
The question set for trial this month is how much the Columbia, Md.-based specialty chemical company owes for injuries, death and other damage linked to its asbestos products. The trial will begin Jan. 14 in a Delaware bankruptcy court and will produce the number that will be the core of Grace’s Chapter 11 exit plan.
If the answer from U.S. Bankruptcy Judge Judith Fitzgerald is $700 million or a little more, Grace and its shareholders are safe and on their way out of bankruptcy, with enough value to cover the asbestos damage bill and have something left over for shareholders.
But if Fitzgerald estimates asbestos liabilities at $2 billion or $3 billion or more, Grace is destined to become the property of people damaged by its toxic products, and shareholders will be out in the cold.
Here’s the link to the rest of the article at Forbes: Grace Trial to Test Asbestos Claims
March 1, 2008 at 5:34 pm |
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