W.R. Grace & Co. will pay $3 billion in settlements

Pittsburgh, PA – Specialty chemicals company W.R. Grace & Co. announced Monday it has reached an agreement to settle all present and future asbestos-related personal injury claims.

According to the terms of the agreement, Grace will pay $250 million in cash to a trust over a period of time and make deferred payments of $110 million per year for five years, starting in 2019. Beginning 2024, the company will make payments of $100 million per year for ten years.

Grace has consented to using its remaining insurance coverage to help victims. The company will also issue warrants to acquire 10 million shares of its common stock at $17 per share. The entire value of the agreement is estimated to be worth $3 billion.

The agreement will give Grace the ability to operate while still in the bankruptcy protection stage, which it filed for in 2001, while paying off part of settlement so in the future, it would be able to pay off the entire amount. At the time it filed for bankruptcy protection, the company had been named in about 325,000 asbestos-related personal injury lawsuits.

By structuring the settlement as a trust fund, both present and future victims of asbestos-related health conditions will be able to receive fair compensation. Also based on the terms of the agreement, Grace will no longer be held liable for further liability for asbestos injury.

Shares of the company’s stock price went up $2.60, or 10.5 percent to $27.45 on the New York Stock Exchange after the announcement.