Victims of WR Grace & Libby Mining
http://www.grace.com/Media/NewsItem.aspx?ID=1126367
Grace Announces Settlement of Asbestos Personal Injury
Claims
COLUMBIA, Md.--(BUSINESS WIRE)--April 7, 2008--W. R. Grace & Co. (NYSE: GRA) today announced an
agreement in principle that would settle all present and future asbestos-related personal injury claims. The agreement,
reached with the Official Committee of Asbestos Personal Injury Claimants, the Future Claimants Representative and the
Official Committee of Equity Security Holders, requires the following assets to be paid into a trust to be established under
Section 524(g) of the United States Bankruptcy Code:
--
Cash in the amount of $250 million;
--
Warrants to acquire 10 million shares of Grace common stock at
an exercise price of $17.00 per share, expiring one year from
the effective date of a plan of reorganization;
--
Rights to proceeds under Grace's asbestos-related insurance
coverage;
--
The value of cash and stock under the litigation settlement
agreements with Sealed Air Corporation and Fresenius Medical
Care Holdings, Inc.; and
--
Deferred payments at $110 million per year for five years
beginning in 2019, and $100 million per year for ten years
beginning in 2024; the deferred payments would be obligations
of Grace backed by 50.1% of Grace's common stock to meet the
requirements of Section 524(g).
The agreement in principle contemplates the filing of a plan of reorganization and related documents with the Bankruptcy
Court. The plan will be subject to approval of its co-proponents, exit financing, and Bankruptcy Court and District Court
approvals.
"This agreement in principle is a very important step in emerging from Chapter 11," said Fred Festa, Grace's Chairman,
President and Chief Executive Officer. "In this challenging global marketplace, we need to be able to focus all of our
efforts on increasing shareowner value and continued improvement in our core businesses. The agreement and the Plan of
Reorganization that will be based on it will be good for our shareholders, customers, creditors, and our employees. 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."
"Also, I want to point out that the Plan of Reorganization will preserve all employee benefits. During the seven years we
have been in Chapter 11, our people have nearly doubled Grace's sales and dramatically improved the core businesses. We
look forward to final approval of our Plan of Reorganization when we can once again operate without the constraints of
Chapter 11," said Festa.
Grace is a leading global supplier of catalysts and other products to petroleum refiners; catalysts for the manufacture of
plastics; silica-based engineered and specialty materials for a wide-range of industrial applications; sealants and coatings
for food and beverage packaging, and specialty chemicals, additives and building materials for commercial and residential
construction. With annual sales of more than $3.1 billion, Grace has about 6,500 employees and operations in over 40
countries. For more information, visit Grace's web site at www.grace.com.
This announcement contains forward-looking statements, that is, information related to future, not past, events. Such
information generally includes the words "believes," "plans," "intends," "targets," "will," "expects," "anticipates,"
"continues" or similar expressions. For these statements, Grace claims the protection of the safe harbor for forwardlooking statements contained in the Private Securities Litigation Reform Act of 1995. Grace is subject to risks and
uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements or
that could cause other forward-looking information to prove incorrect. Factors that could cause actual results to materially
differ from those contained in the forward-looking statements include: Grace's bankruptcy, plans of reorganization
proposed by Grace and others, Grace's legal proceedings (especially the Montana criminal proceeding and environmental
proceedings), the cost and availability of raw materials and energy, Grace's unfunded pension liabilities, costs of
environmental compliance, risks related to foreign operations, especially, security, regulation and currency risks and those
factors set forth in Grace's most recent Annual Report on Form 10-K, quarterly report on Form 10-Q and current reports
on Form 8-K, which have been filed with the Securities and Exchange Commission and are readily available on the
Internet at www.sec.gov. Reported results should not be considered as an indication of future performance. Readers are
cautioned not to place undue reliance on forward-looking statements, which speak only as of the date thereof. Grace
undertakes no obligation to publicly release any revisions to the forward-looking statements contained in this
announcement, or to update them to reflect events or circumstances occurring after the date of this announcement.
CONTACT: Media Relations:
William Corcoran, +1 410-531-4203
william.corcoran@grace.com
or
Investor Relations:
Bridget Sarikas, +1 410-531-4194
bridget.sarikas@grace.com
SOURCE: W. R. Grace & Co.
W.R. Grace to pay record Superfund fine
But $250 million may fall well short of Libby, Mont., cleanup cost
By ANDREW SCHNEIDER
P-I SENIOR CORRESPONDENT Wednesday, March 12, 2008 Last updated 8:22 a.m. PT
The government says it finally has persuaded W.R. Grace & Co. to pick up some of the cleanup
bill for what the Environmental Protection Agency has called the worst environmental disaster in
U.S. history.
The Justice Department on Tuesday announced that Grace had agreed to pay a record-setting
$250 million to reimburse the federal government for the costs of the investigation and cleanup
of asbestos contamination in Libby, Mont. Officials at Justice and EPA said the payout will be the
largest in the history of the Superfund program.
People from both agencies involved with Libby and Grace told the Seattle P-I that the money
may not come close to paying to remove the lethal fibers from the homes, businesses, ballfields
and schoolyards of the community. Earlier estimates neared $500 million. This, health experts
say, is because much is still unknown about the toxicity of the tremolite asbestos contaminating
the vermiculite ore, beyond the fact that it is far more dangerous than other asbestos material.
The EPA has been on the scene in the tiny northwestern Montana community since November
1999, arriving three days after the P-I first reported that hundreds of miners and their family
members had died or were sickened by exposure to asbestos fibers released from Grace mine on
Zonolite Mountain. The newspaper reported on hundreds of Grace documents that showed the
company knew its ore was dangerous and that miners, who were being sickened and killed by it,
were never warned of the hazard.
A research arm of the Centers for Disease Control and Prevention that conducted the nation's
largest environmental health study found that close to 20 percent of the 5,500 residents tested
had lung abnormalities. All of them had lived, worked or played in Libby before Grace closed the
mine in 1990.
Earlier this year, physicians monitoring the situation in Libby told the P-I that neither reports of
new cases of illness nor asbestos-related deaths have peaked.
"Getting anything they can from Grace is good, but the graveyard is filled with miners, their
families, my parents and others who were killed by the asbestos in the ore that Grace mined for
years," said Gayla Benefield, an activist who, with her partner Les Skramstad, fought to bring
attention to the plight of their community.
"Obviously, this money will not bring them back, but maybe, just maybe, it may pay for the
cleanup that will make this community safer for those who survived."
"Don't forget" she added, quoting Skramstad, who died last year, "no one from Grace has ever
come back to say they were sorry."
Grace's problems are far from over. On Feb. 7, 2006, on the steps of the county courthouse in
Missoula, Mont., U.S. Attorney Bill Mercer announced a 10-count criminal indictment against
seven senior current and former Grace officials. He alleged conspiracy, knowing endangerment,
obstruction of justice and wire fraud for endangering the people of Libby by concealing welldocumented hazards of the tremolite asbestos.
The trial has been postponed three times as Grace challenges a variety of issues. The Justice
Department said it has yet to be rescheduled. Grace has been given until April 14 to submit an
appeal to the Supreme Court if it wants to challenge an appellate court's decision restoring key
charges against the worldwide chemical company, its executives and former mine managers.
Tuesday's court decree would settle a bankruptcy claim brought by the federal government to
recover money for past and future costs of cleanup of contaminated schools, homes and
businesses in Libby. In December, the Justice Department reported that Grace agreed to pay $34
million to clean up 32 of the scores of contaminated sites in North America where the company
processed its vermiculite. It was sold for attic and wall insulation and lawn products.
The insulation, Zonolite, has been shown by the government to be heavily contaminated with
asbestos and is still in 15 million to 35 million homes in the United States and countless more in
Canada and elsewhere.
The federal government filed suit against Grace in March 2001 to recover its investigation and
cleanup costs under the Superfund law. The lawsuit also named Kootenai Development Corp. -- a
Grace subsidiary -- as a defendant because of its ownership of three contaminated properties in
Libby.
In 2003, the federal District Court in Montana awarded the EPA more than $54 million for
cleanup costs incurred by the EPA during its first year of attempting to clean up the heavily
contaminated town. But that award has not been paid because of the chemical company's
bankruptcy, which Grace and 61 affiliated companies filed in 2001. At that time, Grace said it
took the action to protect itself from thousands of lawsuits filed on behalf of those sickened or
killed by the tainted vermiculite.
Asbestos, a recognized human carcinogen, is known to cause lung cancer and mesothelioma, a
lethal tumor of the lining of the chest and abdominal cavities. Exposure can also cause
asbestosis, a disease characterized by scarring of the lung.
Grace has corporate headquarters in Columbia, Md., and employees in nearly 40 countries. It
manufactures construction chemicals, building materials and chemical additives.
The settlement requires Grace to pay the $250 million within 30 days of bankruptcy court
approval.
SPECIAL REPORT
The tiny town of Libby, Mont., depended for years on the jobs at a vermiculite mine. After the
mine closed, a Seattle P-I investigation showed the town is paying a tragic price for those jobs.
Hundreds of former miners, their wives and children, and other townspeople have either died or
been diagnosed with fatal illness from asbestos the mine released into the air. Read the
complete special report..
P-I senior correspondent Andrew Schneider can be reached at 206-448-8218 or
andrewschneider@seattlepi.com.
W.R. Grace buys its old Libby mine, then bans EPA investigators from it
Tuesday, July 25, 2000
By ANDREW SCHNEIDER
SEATTLE POST-INTELLIGENCER REPORTER
The abandoned mine that caused the deaths and illnesses of hundreds of miners and their
families in Libby, Mont., has been bought again by its longtime owner, W.R. Grace & Co.
Immediately after the purchase last week, Grace banned Environmental Protection Agency
investigators from the asbestos-contaminated site.
As EPA lawyers examine their options for regaining access to the site, the agency's health
experts are warning everyone who lived in Libby while the mine was open that they may have
been exposed to harmful amounts of asbestos.
In newspaper ads and radio broadcasts, the EPA cited tests for asbestos
in the air taken by Grace in 1975 and for the EPA in 1980. Both tests
showed high levels of asbestos in the center of the northwestern
Montana town, six miles from the mine. The tests were done during rainy
conditions, which could actually reduce the amount of asbestos fibers in
the air.
"We believe these were not isolated instances and that during dry
weather, during weather inversions over Libby and during periods of high
production at the mine or processing areas, asbestos fiber counts could have been much higher,"
the EPA notifications said.
"Therefore it is clear," the public announcements continued, "that a person was likely exposed to
asbestos fibers simply by living in Libby."
The notice urged anyone living in Libby for more than six months prior to Jan. 31, 1990, to get
tested for asbestos-related disease by their family physicians or at a free screening clinic
operated by the Agency for Toxic Substances and Disease Registry.
"We're running the notifications because we believe that asbestos exposure from the mine might
have reached far more people than originally believed," says Paul Peronard, who has been
coordinating the EPA's emergency response team in Libby since the week after the Seattle PostIntelligencer reported the health problems in November.
"Too many people view this as a problem for the miners at the old vermiculite operation,"
Peronard says. "Too many people believe the only ones getting sick and dying are the people
who worked there. That clearly is not the case. We need to get everyone who lived in the area
when the mine operated in for testing."
The P-I reported last year that dozens of miners' family members were killed or sickened by
asbestosis, lung cancer and mesothelioma. Many more have since been added to the casualty list
by the EPA and other government researchers.
The Lincoln County Health Department in Libby reported last week that medical screening,
started only recently, has already identified 48 non-occupational cases, the majority of them in
families of miners. Of greater concern to Peronard's team and the other health investigators is
that 18 of those cases were people who had no family connection to the mine.
"These 18 look like their exposure may have come from just living in Libby, and that's why we
want everyone examined," Peronard says. "There is a lot about that old vermiculite mine that we
don't know."
For nearly six decades, the mine was the nation's largest producer of vermiculite. The processed
ore, called Zonolite, was used in insulation, lawn and garden products and fireproofing. Millions
of tons of the ore was shipped across the country for processing at hundreds of plants. At several
of the plants, the P-I found that the work force had been decimated by asbestos-related disease.
The EPA is investigating all of the plants to see whether an asbestos hazard remains.
Grace closed the Libby mine in 1990, and three years later sold the property to Kootenai
Development Corp., which planned to develop the land into a hunting reserve and someday, the
owners said, a housing development.
Grace's action banning EPA from "old Zonolite Mountain" and the other areas it repurchased is
frustrating the agency's efforts to complete the cleanup of asbestos, Peronard says.
The move by Grace was surprising to some in light of the fact that the company has repeatedly
said it "takes its responsibility to the people of Libby seriously" and "will do everything possible
to expedite the cleanup."
Last Friday, just days after Grace took ownership of the Kootenai Development Corp. property,
the EPA received a letter from Grace's lawyer David Cleary. The letter said: ". . . the USEPA and
its representatives, contractors, agents or guests are hereby forbidden from entering any KDC
property."
William Corcoran, Grace's vice president for public and regulatory affairs, says Grace ordered the
federal agents from the mine because the company received a letter from the EPA that it didn't
like or understand.
"They sent us a letter the day before (we issued the ban) saying we had 24 hours to sign some
sort of an agreement to give them access to the site and we didn't know what that meant,"
Corcoran said. "So we said, 'We're not going to sign your letters.' We want to know what access
means."
The EPA letter to which Grace took umbrage appears fairly clear as government documents go. It
told Grace, the company responsible for the asbestos contamination, that the EPA wants to enter
the mine to sample the soil, water and air and any other material disposed of on the site. It
wants to store the asbestos-contaminated soil from the old Grace sites in town and elsewhere on
the mine property and take "other actions deemed necessary to protect human health and the
environment."
Peronard said there was nothing complex in the letter.
"We still have a lot of investigative work to do up there to determine the risk that the mine site
poses," he said. "We're still trying to answer the question of whether asbestos is still leaving the
site. Is it blowing around up there? How far out does the asbestos contamination occur? We have
a lot of work to do and the mine is the heart of the problem."
Kenneth Lund, a lawyer representing KDC/Grace, wrote to the EPA saying the agency could take
the asbestos-contaminated soil and haul it to a hazardous-waste disposal facility in Spokane, or
pay the company to dump it on the old mine property.
Peronard's only comment was, "We're not going to pay Grace a penny."
The history of W.R. Grace & Co.
Thursday, November 18, 1999 SeattlePI
W.R. Grace Co. had a not-so-fragrant beginning in 1854. William R. Grace, who had fled the Irish
potato famine for Peru, chartered ships to trade bat guano and bird droppings.
Twelve years later, he moved his headquarters to New York and set up a worldwide network
trading fabric, fertilizer, machinery and other products.
In the middle of World War II, William Grace's grandson, Peter, took over control of the company
and ran it for almost a half century, until 1993.
Although the company's focus remained on chemicals and packaging, Peter Grace diversified
Grace into everything from sporting goods to tacos.
Starting in 1995, Grace divested many of its larger businesses.
In 1998, the Securities and Exchange Commission sued Grace for manipulating earnings in one
of its divisions. To settle the suit, Grace set up a $1 million financial education fund.
Grace has gone through elaborate reorganization in the past decade.
Lawyers handling the asbestos suits against Grace say the shuffling was done to conceal assets
and cloud the corporate lines of responsibility. Grace denies the charges and calls the moves
"solid business decisions."
Although it has downsized, Grace's sales are still about $1.4 billion a year.
But like other giant companies that sold asbestos products during the heyday of the flameproof
fiber, Grace is still plagued by lawsuits filed by people allegedly harmed or killed by the fibers in
the insulation, garden products and other applications it sold.
More than 250,000 asbestos-related suits have been filed against Grace.
Almost all of them except the 187 involving the miners and the families from Libby are personalinjury suits dealing with the hazards of asbestos products, said Jay Hughes, Grace's top litigation
counsel.
About 150,000 suits have been settled or dismissed. An estimated 102,000 cases remain, he
said.
A spotlight was thrown on one of Grace's darkest moments when the movie "A Civil Action" was
released in January.
John Travolta and Robert Duvall dramatized the book of the same name written by Jonathan
Harr. The book told the story of families living in the old New England mill town of Woburn on
the outskirts of Boston.
Five Woburn children and one adult died of acute lymphocytic leukemia from exposure to
chemicals in their drinking water. Others were sickened. Grace and another company were found
by the Environmental Protection Agency to be responsible for dumping the toxic chemicals that
poisoned two of Woburn's wells.
Grace paid $8 million to eight families in return for the withdrawal of lawsuits they had filed.
Later, Grace was indicted by the Department of Justice on two counts of lying to the EPA in 1982
about the amount of hazardous chemicals it used at its Woburn plant. In 1988, Grace pled guilty
to one count and was fined the maximum -- $10,000. Today, the penalty for that charge is
$500,000.
Day 1
· A town left to die
· It all started with the search for gold
· The History of W.R. Grace Co.
· Dangers of asbestos exposure
· Known deaths from tremolite from Libby mine (graphic)
Day 2
· While people are dying, government agencies pass buck
· 'No one ever told us that stuff could kill you'
· Libby's lost miners: A gallery
· Group organizes to help victims
Followups
(newest at top)
· W.R. Grace to pay record Superfund fine
· Finally, asbestos-plagued Libby, Mont., to get help
· Up to 30% tested in Libby hurt by asbestos
· W.R. Grace files for bankruptcy
· Labor Dept. enters Libby's asbestos fight
· Why did dying miners get no help?
· Health warning on attic asbestos
· W.R. Grace buys its old Libby mine, then bans EPA investigators from it
· Grace backs off pledge to clean up asbestos
· Grace sends papers to EPA -- reportedly tainted
· A small group of physicians is trying to change the course of asbestos-induced disease
· One victim's story: '(I) couldn't get a breath; it scared me to death almost' · Horseman in the race of his
life
· Class-action suit targets Grace Co., insulation
· Mine-safety agency takes action
· Immediate cleanup sought in mining town
· Grace to pick up medical bills in tainted town
· Asbestos study is expanded nationwide
· Deadly ore was shipped around U.S., Canada
· Just 23 months hauling ore--and it killed him 36 years later
· Finally, asbestos victims have their say
· Initial tests reveal areas of asbestos in and around Libby
· Montana's governor knows asbestos danger
· State, federal authorities sending teams to Montana mining town
· Editorial: Libby folks must get some answers
· EPA sues for access to Libby vermiculite mine
Miners' search for gold led to vermiculite
Thursday, November 18, 1999
By ANDREW SCHNEIDER
SEATTLE POST-INTELLIGENCER SENIOR NATIONAL CORRESPONDENT
Prospectors first put pick and shovel to Zonolite Mountain 119 years ago.
Many mining-claim records are missing or illegible, but what can be made out indicates that in
1881, Robert Rannie and his partner, while searching for gold along a creek, dug a 40-foot-long
shaft following a vein of quartz.
Thirty-eight years later, Edward Alley, a part-time miner and the owner of the Libby Hotel, stood
in the same partially collapsed shaft. As he moved his flaming torch around the dark hole, the
flame, glittering off mica-like crystals, brushed the top of the shaft. Popping sounds echoed off
the walls, and he noticed that the sparkly material, heated by the flame, had expanded into large
puffy clusters, weighing next to nothing.
When he held the flame beneath them, the clusters did not
burn.
Scientists told him that it wasn't mica, but a little-known
substance called vermiculite. Alley, a survivor of the
Spanish-American War who had taken a couple of geology
classes at the University of Nebraska, named it Zonolite.
"The raw material is but two feet under the cover of soil and
to a depth of 150 feet," Alley said. "We've got a mountain of
it."
Government scientists in Washington, D.C., told him he had
something unique and valuable.
This company photo from the early 1970s shows
the W.R. Grace vermiculite mine.
The chief mineral technologist at the U.S. Bureau of Mines called the expansion of the vermiculite
the most remarkable phenomenon he had ever witnessed.
By 1924, Alley had built a primitive roasting kiln that produced four tons of Zonolite a day.
On March 25, 1925, Great Northern Railroad shipped the first boxcar of Zonolite from Libby to a
Hillsboro, Ohio, company that used it to insulate bank vaults, office safes and filing cabinets. Also
that year, a New York company developed a method of using Zonolite to make building boards at
half the weight and twice the strength of wood. And a Billings, Mont., firm developed a new
"permanent" roofing material using 70 percent Zonolite and 30 percent asphalt. They claimed it
was fireproof and would "last forever."
Later that year Alley sold his hotel and several other properties in Libby and mortgaged his ranch
to increase the size of the operation. By mid-1926, he was running a much larger plant,
producing up to 100 tons a day.
The process was simple. The vermiculite ore was stripped from the top of the mountain and
hauled in huge trucks to a mill, where it was separated into various commercial sizes through a
dusty screening system. Some of the ore was shipped untouched. Other material was sent to an
expansion plant, where it was run through ovens at about 2,000 degrees, causing it to "pop" to
15 times its size.
Before Alley died in 1935, he shepherded the obscure mineral into thousands of products being
sold around the world.
In 1939, Zonolite merged with another company mining the bottom of the hill and became the
Universal Zonolite Insulation Co. Nine years later the name was changed to the Zonolite Co.
In 1963, the company was sold to W.R. Grace and Co. Very quickly, Grace expanded the
operation and increased production.
Through the '60s, '70s and '80s, a near-continuous line of Burlington Northern rail cars hauled
millions of tons of the vermiculite ore to Grace plants and other companies in 30 states and six
foreign countries. The featherweight material was showing up in dozens of new products, from
lawn fertilizer to fireproofing.
Over the years, 1,898 men and women worked at the mine, as many as 332 at any one time,
working two and sometimes three shifts a day. At times, the miners were the best-paid workers
in town.
Almost 80 percent of the world's vermiculite came from Libby. The rest came from South Africa
and another Grace mine in South Carolina. The workers were proud of what they were
accomplishing. In the history of the company there was only one strike. It lasted 27 days.
In 1990, when Grace closed the mine citing economic reasons, company documents contained
estimates that "another 80 or 100 years worth of vermiculite can be pulled out of that
mountain."
In 1994, Grace sold the property to three men -- two local loggers and Jack Wolters, formerly
vice president of Grace's construction products division. Plans for the 4,000-acre site have not
been decided, said Mark Owens, one of the trio and a third-generation logger.
"We're not really sure what we're going to do," Owens says. "We may log and reforest it,
perhaps build a wildlife area or maybe some type of development."
Asked if his group might mine the mountain again, he would only say, "There's a lot of ore left in
that hill."