W.R. Grace Claims to Asbestos Victims
W.R. Grace & Co. said it will not have to pay U.S. income taxes for three years after it emerges from bankruptcy because losses stemming from asbestos-related health claims can be counted against earnings. Many who were working for or exposed to asbestos containing products manufactured by W.R. Grace developed mesothelioma, asbestosis and other asbestos related lung cancers. Lawsuits were filed against the company by employees and others who used Grace products.
W.R. Grace will pay $1.5 billion to settle the claims that forced it to seek bankruptcy protection in 2001, triggering $922 million in net operating losses that will negate taxes on domestic earnings for three years, Chief Financial Officer Hudson La Force told reporters on April 22, 2010. W.R. Grace posted first-quarter net income of $56.3 million.
W. R. Grace operated a vermiculite mine and processing mill in Libby, Mont., from 1963 to 1990. Asbestos is a natural component of vermiculite. W.R. Grace manufactured many asbestos containing products including Zonolite and Monokote fireproofing.
W.R. Grace filed for bankruptcy protection in 2001. Just prior to filing for bankruptcy protection the company transferred several billion dollars to newly formed companies in an attempt to protect itself from civil suits filed by victims of asbestos disease. The U.S. Justice Department found this to be a fraudulent transfer of funds, and the courts ordered that over a billion dollars be returned to the company to be used to pay off the debts.
In 2008, W.R. Grace agreed to settle outstanding asbestos-related claims and fund a trust for future claimants. The agreement was to allow W.R. Grace to move forward with its reorganization, with the aim of emerging from bankruptcy protection by the end of that year. However, in 2010, W.R. Grace has yet to emerge from bankruptcy proceedings and has yet to begin paying claims to victims of asbestos disease.
It is anticipated that the trust will begin accepting claims from asbestos victims in the near future. Clapper, Patti, Schweizer & Mason will be filing claims for all of their eligible mesothelioma clients and their families.
