After nearly 13 years in bankruptcy, chemical maker W.R. Grace & Co. formally emerged from court protection Monday, bringing an end to one of the longest Chapter 11 cases in U.S. history.
The Columbia-based company's joint plan of reorganization went into effect Monday, establishing two trusts that will award more than $4 billion to personal injury claimants and property owners.
"It has been expected perhaps for longer than we would want, but nonetheless we're very pleased to move on," said Rich Badmington, Grace's vice president of global communications.
Grace filed for a Chapter 11 reorganization in April 2001, faced with more than 100,000 asbestos-related claims. Since then, the slow-moving case crawled through negotiations, settlements and appeals in a Delaware federal bankruptcy court. Despite the bankruptcy, the firm thrived, making more than 24 acquisitions and increasing share price from $1.52 to more than $90.
Shares in Grace slipped $2.04 to $92.28 each in Monday's overall market swoon.
The exit from Chapter 11 will allow Grace, which employs 6,500 people worldwide and nearly 1,100 in Maryland, to focus on "top-line growth," particularly sales, Badmington said. Grace likely will have about $3 billion in revenue when it reports results for 2013 next week.
"One of the biggest benefits of emergence is the removal of uncertainty," Badmington said. "For some time now, we've known where we're taking the business. Now that can be our exclusive focus."
In Maryland, Grace operates a major manufacturing facility in Curtis Bay as well as its headquarters and a research-and-development facility at its Columbia campus.
While Grace faced asbestos-related claims from several sources, many of its financial woes stemmed from a mine in Libby, Mont. Grace acquired the Zonolite mine in 1963 and operated it until 1990.
For years, asbestos released by the extraction of vermiculite, a material used in commercial insulation, traveled throughout the town. Asbestos fibers can be lethal, damaging lungs and causing certain cancers. Hundreds of Libby residents were sickened and died as a result of the exposure.
Plaintiffs at one time claimed more than $7 billion in liabilities. Grace settled for about $4 billion.
Grace submitted a plan for reorganization to a Delaware bankruptcy judge in 2010 that called for it to pay off all other "allowed claims" in full.
In December, the company settled the last remaining appeal, agreeing to a $129 million settlement for creditors who were seeking a higher interest rate on their loans, in addition to a payout of $971 million for principal and undisputed interest. Grace received approval in January to line up $1.55 billion in exit financing.
Reuters contributed to this article.Copyright © 2014, The Baltimore Sun