W. R. Grace & Co: Settling liability
In our view: The W.R. Grace asbestos agreement should be approved
There is something positive offered to all sides in the huge settlement from litigation involving W. R. Grace & Co. and thousands of asbestos victims. Although the deal comes with an estimated cost of over $3 billion, it is expected to help move W.R. Grace & Co. out of the Chapter 11 bankruptcy that it filed for in 2001. Now, victims and their families will receive some compensation although no amount of money can end the pain and suffering associated with losing a loved one or experiencing poor health due to toxic product exposure.
Based in Columbia, Maryland, Grace was presented with more than 100,000 personal injury claims. This is because its building materials and fire protection products contained asbestos before 1973, when the material, which has causal links to lung cancer and other illnesses, was considered harmful enough to warrant legal action. Mass tort lawsuits can go on for years, and gum up the courts and enrich attorneys instead of plaintiffs. Significant reforms, however, have remained elusive. Most often plaintiffs and companies reach agreements because they are both faced with continual uncertainty and risk of loss.
W.R. Grace's liability, in this case, was estimated to range from $385 million to over $6 billion. Some reasonable measures were proposed by the company and the bankruptcy judge accepted them, including a lengthy questionnaire designed to help identify those individuals who its products may have harmed. Under the plan, Grace with pay into a trust fund until 2034 from which past, present and future victims can request fair compensation providing the judge and a majority of claimants are in agreement.
It is acknowledged by W.R. Grace officials that the end of the lawsuit and bankruptcy proceedings will make way for the Maryland based company that employs 1,100 people to focus solely on manufacturing high quality products for its customers. However, both customers and asbestos victims would agree that the products should also be safe in order to create a winning combination for all.