U.S. Seeks to Intervene in W.R. Grace Asbestos Bankruptcy
LIBBY, MONTANA—June 14, 2002—On behalf of the Environmental Protection Agency, the U.S. Department of Justice has filed a motion to intervene in a bankruptcy action involving offshoot companies of W.R. Grace, a major asbestos defendant. The government charges that just prior to bankruptcy filing, W.R. Grace transferred funds to spin–off companies to hide assets and avoid liability for asbestos claims (Daily Inter Lake Newspaper, Kalispell, Montana, May 27, 2002). The company and 61 domestic subsidiaries had filed for bankruptcy reorganization under Chapter 11 of the United States Bankruptcy Code in April, 2001.
W.R. Grace is the manufacturer of construction materials and chemicals and the former owner of an asbestos–contaminated vermiculite mine in Libby Montana. Vermiculite is an ore resembling mica that is used in housing insulation, soil conditioners, and fertilizers.
The United States is a Grace creditor and hopes to recover expenses for the environmental cleanup of Libby, which has been declared a Superfund disaster area. The company has received over 325,000 asbestos personal injury claims from Libby and elsewhere, according to a press release (see W.R. Grace web site, click on GRACE in the News, click on 2001 News Releases, then on April 2, 2001).
Asbestos Insulation and Fireproofing
One W.R. Grace product, Zonolite insulation, often contains vermiculite that is contaminated with tremolite asbestos and derived from the Libby mines. The Environmental Protection Agency is removing Zonolite from homes in Libby, although it has no immediate plans to eliminate the insulation from millions of other residences nationwide (see article on Asbestos Zonolite Insulation in Libby).
Grace is also the maker of Monokote fireproofing spray. This product contained dangerous levels of tremolite asbestos, a fact that the company chose to hide from consumers, according to a N.Y. Times report (see W.R. Grace Was Silent About Asbestos in Monokote).
For more information about asbestos in residences and buildings, see Is There Asbestos in My Home? and Asbestos Use in Buildings. If you have been exposed to asbestos on the job or through other circumstances and are concerned about your legal rights, please feel free to contact the attorneys at Brayton Purcell.