W.R. Grace asbestos committee, future claimants' representative file plan of reorganization

By Caroline Salls

Pittsburgh, Nov. 6 - W.R. Grace & Co.'s official committee of asbestos personal injury claimants and future claimants' representative David T. Austern filed a plan of reorganization Monday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the company's exclusive right to file a plan of reorganization was terminated in July after years of failed plan negotiations.

An asbestos trust will be established under the plan to pay all asbestos personal injury claims.

The trust will be funded by a Sealed Air Corp./Cryovac, Inc. payment, which includes $512.5 million in cash and 18 million shares of Sealed Air common stock; up to $500 million in asbestos personal injury insurance rights; cash equal to a distributable cash percentage multiplied by the estimated personal injury amount; and shares of W.R. Grace common stock equal to the adjusted personal injury claim amount, minus the amounts of the Sealed Air payment, the asbestos personal injury insurance rights and the cash paid to the trust.

Treatment of creditors under the plan will include:

• Holders of administrative claims, priority claims and priority tax claims will receive full payment in cash;

• Holders of secured claims will receive either full payment in cash or the return of the property securing the claim;

• Unsecured pass-through employee related claims, workers' compensation claims, Zonolite Attic Insulation claims and intercompany claims will remain unaltered;

• Holders of asbestos personal injury claims will be paid through the asbestos trust;

• Holders of asbestos property damage claims, environmental claims and general unsecured claims will receive their share of cash and W.R. Grace common stock. Cash and stock reserves will be established under the plan for potential payment of any unresolved property damage claims and any unresolved environmental claims;

• Equity interests in the parent company will be cancelled, and holders will receive no distribution under the plan; and

• Holders of equity interests in debtors other than the parent will retain the rights to their interests.

The committee and future claimants' representative expect to obtain exit financing to fund the plan.

W.R. Grace, a Columbia, Md.-based specialty chemicals company, filed for bankruptcy on April 2, 2001. Its Chapter 11 case number is 01-01139.

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