Court Confirms W.R. Grace Chapter 11 Plan
BankruptcyData.com announced that the 17th-largest publicly traded bankruptcy of 2001, chemical and construction holding company W.R. Grace & Co., which listed $2.6 billion in pre-petition assets, received approval of its plan. The courts denied all objections and confirmed Grace’s Plan of Reorganization in its entirety.
On January 31, 2011, the company said that both the U.S. Bankruptcy and District Courts in the District of Delaware approved its plan, which was jointly proposed by the debtors, the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants’ Representative and the Official Committee of Equity Security Holders. W.R. Grace & Co. filed for bankruptcy protection in April 2001 in response to an increase in personal injury asbestos-related claims asserted against it. A summary of the now-confirmed plan available at BankruptcyData.com explains that, in 2000, asbestos-related claims against the company increased 81% – with an even higher rate of increase during the first three months of 2001.
W.R. Grace & Co.’s First Amended Joint Plan of Reorganization resolves, among other things, the company’s mounting asbestos personal injury litigation and establishes two asbestos trusts to compensate personal injury claimants and property owners. Funds for the trusts will come from a variety of sources including cash, warrants to purchase W.R. Grace common stock, deferred payment obligations, insurance proceeds and payments from certain third parties. The trusts’ assets and operations are designed to cover all current and future asbestos claims.
W.R. Grace & Co.’s duration from petition to confirmation date was nearly 11 years – a long proceeding even when compared to other asbestos-related bankruptcy filings – and the Chapter 11 proceeding is still active. Until the plan, which remains subject to appeals, becomes effective, W.R. Grace & Co. cannot officially emerge from bankruptcy protection. BankruptcyData.com reveals that the average stint of publicly traded asbestos-related filings is closer to the five-year mark.
“This is another necessary step in emerging from Chapter 11,” said Fred Festa, Chairman and CEO. “Two Federal courts have now ruled that our Joint Plan is fair to all parties.”
“I am optimistic that the legal process related to our Joint Plan is coming to an end and we can emerge in the near future,” said Festa. “It is time to put the Joint Plan into effect so that money can begin to flow to claimants who have been waiting for more than a decade to be compensated, and Grace can move forward as well. I look forward to Grace emerging from Chapter 11 as a vibrant, growing company with a great future.”
BankruptcyData.com, a division of New Generation Research, Inc., provide news, retention data, financial history, creditor information, reorganization plan summaries and more for publicly traded companies that have filed for bankruptcy protection since 1980.
Previously on abfjournal.com: