W.R. Grace gets court OK of $2 million asbestos insurance settlement

By Caroline Salls

Pittsburgh, June 2 - W.R. Grace & Co. received court approval of a $2 million settlement with North Star Reinsurance Co., according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

According to the motion, North Star issued a single policy of excess liability insurance to Grace for the period July 17, 1974 to June 1, 1975.

The policy provides $3 million in coverage as part of a quota share layer of $50 million per occurrence and for products and completed operations hazards, all in excess of $100 million in underlying limits.

The company said it has incurred and could continue to incur liabilities, expenses and losses stemming from asbestos-related claims for which it seeks coverage under the policy.

However, Grace said disputes have arisen with North Star regarding the rights and obligations for coverage of asbestos-related claims.

Under W.R. Grace's proposed plan of reorganization, asbestos insurance rights, including rights to coverage under the policy, are to be transferred to a trust to be used to fund payment of asbestos personal injury claims.

Through the settlement, North Star will pay $2 million to the plan trust without need for a lawsuit to enforce the assignment of rights to the trust under the policy.

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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