W.R. Grace & Co., a Columbia-based maker of specialty chemicals that is going through bankruptcy, said yesterday that it has revised its reorganization plan and won the support of two creditor committees.
Two other committees, representing asbestos personal injury and property claimants, still object to the plan, which maintains a proposal to limit Grace's asbestos-related liabilities to $1.61 billion.
In a filing yesterday with the Securities and Exchange Commission, Grace said the revised plan addresses "many of the objections raised by creditors and other interested parties to the plan," which originally was filed with U.S. Bankruptcy Court in Delaware in November.
Two committees, one representing unsecured creditors such as banks and vendors, and one representing shareholders, have agreed to the plan, the company said in the SEC filing.
The plan would give shareholders less than 50 percent of the stock of the reorganized company once it emerges from bankruptcy protection, said Philip Bentley, an attorney representing the shareholders' committee.
In one change, the revised plan proposes paying unsecured creditors not only the value of their allowed claims but interest at rates that would vary from 4.19 percent to 6.09 percent. An attorney for that committee could not be reached for comment yesterday.
The revisions fail to address objections of asbestos claimants, their attorneys said yesterday.
Scott Baena, an attorney for the official committee of asbestos property claimants, said the proposal for a limited trust fails to provide enough money or an effective way to pay claims.
"This plan just adds insult to the injury they have already inflicted on asbestos claimants," Baena said.
The lawyer said he represents owners of about 4,200 buildings across the United States that contain asbestos from former Grace products.
The claims against Grace stem from asbestos the company added to some of its fire-protection products before 1973. Grace also mined and processed vermiculite - a substance used in insulation, potting soil and fertilizer - in Libby, Mont., for 27 years. Vermiculite contains a type of naturally occurring asbestos. Lung ailments in Libby have been blamed on the mining activities.
The revised reorganization plan also fails to address objections of personal-injury asbestos claimants, said Peter Lockwood, an attorney representing those claimants.
His clients are mostly workers in construction trades that installed Grace's asbestos-containing products in homes or other buildings and were exposed to dust, as well as residents of Libby, Mont., who worked at or lived near the former vermiculite mine.
Lockwood estimated those claims at more than 100,000, with estimated liabilities of more than $5 billion.
"They're not putting up nearly enough money," he said.
Grace, a 150-year-old company that employs 1,200 in Maryland, has argued that it was forced to settle tens of thousands of fraudulent asbestos-related claims before filing for bankruptcy in 2001.
Yesterday, a Grace spokesman defended the company's proposal to set up a $1.6 billion trust to fund the claims.
'Efficient and fair'
"Based on the information Grace has, that number is adequate," said Greg Euston, a spokesman for Grace.
Bentley, the attorney representing the equity committee, agreed that a large number of claims lack merit.
"The plan establishes a sound set of procedures for bringing those issues to the courts for resolution in a manner that is efficient and fair," he said.
Baena, the attorney for the property damage claimants, said that claimants had been awarded more than $1 billion in a legal settlement and that "all this plan does is give us benefit of that recovery."
Grace makes chemicals used in petroleum refining, plastics, sealants, additives used in residential and commercial construction, and coatings for food packaging, among other things. Its Grace Davison division operates a plant in South Baltimore.
Hearing on procedure
A hearing on Grace's amended disclosure statement is scheduled for Jan. 21 in the bankruptcy court in Delaware.
The hearing is expected to focus on procedures for estimating liabilities and on the process by which creditors will vote on the company's reorganization plan, which is subject to approval by the court.