Judge Trying to End Stalemate in WR Grace Asbestos Case

An article in the Washington Post reports that a bankruptcy judge on Thursday cut off W.R. Grace’s exclusive control of the bankruptcy case, opening up the possibility of competing Chapter 11 proposals for the specialty chemical conglomerate.

According to the article, Judge Judith Fitzgerald of the U.S. Bankruptcy Court in Wilmington, Del., granted a motion by lawyers for asbestos claimants, who have been unable to reach an agreement with company. The Columbia, Md.-based company has been in Chapter 11 bankruptcy since 2001 and faces myriad asbestos exposure claims.

“Termination of exclusivity will facilitate moving the case toward conclusion by changing the dynamics for negotiation while permitting (Grace) to continue to operate their business, resolve claims and participate in negotiations,” the judge wrote.

W.R. Grace reports that it has already spent in excess of $23 million during the second quarter of 2007 for legal defense in the federal case against 7 Grace executives who are accused of failure to warn employees of the risks of working at Grace’s various facilities, where hundreds were exposed to asbestos on a daily basis. Many of these employees have filed lawsuits as have scores of people who live in the communities surrounding Grace’s vermiculite mines and Zonolite plants, who were also affected by the inhalation of asbestos fibers that permeated the air.

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