Settlement of the Month: W.R. Grace Tentatively Settles Asbestos Claims
UPDATE: FOR THE LAW.COM AMERICAN LAWYER ARTICLE ON THE NEGOTIATION OF THIS SETTLEMENT, FAMILIAR FACES CENTRAL TO SETTLEMENT (ETC.) CLICK HERE; EXCERPT BELOW:
When you're negotiating a multibillion-dollar settlement, it helps if you've already made similar deals with the lawyers on the other side of the table.
The veteran dealmakers who put together W.R. Grace & Co.'s settlement of asbestos claims, which was announced Tuesday, "know each other well and know the process well," says David Bernick, the Kirkland & Ellis partner who led the talks for Grace. The lawyers representing asbestos plaintiffs in the negotiations were Perry Weitz of Weitz & Luxenberg, Joseph Rice of Motley Rice, Steve Baron of Baron and Budd, and John Cooney of Cooney & Conway.
"These are the same folks I've done business with for many years," adds Bernick. "That makes it much, much easier."
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The Baltimore Business Journal announced today the W.R. Grace & Co. tentative $2B settlement on asbestos claims here.
W.R. Grace & Co. Inc. has reached a proposed settlement of all current and future asbestos-related personal injury claims against the company -- a huge step toward Grace's goal of emerging from bankruptcy reorganization.
Columbia-based chemicals giant Grace (NYSE: GRA) filed Chapter 11 bankruptcy in 2001, facing huge liabilities related to asbestos. The company said Monday that it has reached the tentative settlement with a committee of asbestos personal injury claimants, a representative handling future claims and a committee of Grace stockholders.
The complex settlement would total more than $2 billion and would include:
- $250 million in cash;
- Deferred payments of $110 million per year for five years beginning in 2019, and $100 million per year for 10 years beginning in 2024. The deferred payments would be backed by just over half of Grace's common stock;
- Warrants to buy 10 million shares of Grace common stock at an exercise price of $17 per share. The warrants would expire a year after Grace's reorganization plan takes effect. Grace shares were trading at $26.78 late Monday morning, up 8 percent;
- Rights to proceeds of Grace's asbestos-related insurance coverage;
- The value of cash and stock under settlements of litigation with Sealed Air Corp. and Fresenius Medical Care Holdings.
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