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W.R. Grace general unsecured creditors to get cash and stock
By Jeff Pines
Washington, Nov. 15 - W.R. Grace & Co.'s general unsecured creditors will get cash and stock for their claims, according to its reorganization plan and disclosure statement filed with the U.S. Bankruptcy Court for the District of Delaware this weekend.
The Columbia, Md.-based specialty chemical manufacturer estimates there are $951 million plus interest on these claims. It expects to pay the general unsecured creditors 85% of their claims in cash and 15% in stock in the reorganized parent company.
Grace would finance these payments with $150 million of cash on hand, $115 million from Fresenius Medical Care Holdings, Inc. paid in settlement of asbestos and other Grace-related claims, $800 million in new debt and $143 million in value of Grace common stock.
Shareholders will be able to vote on their plan since their shares will be diluted.
The plan calls for a trust to be created to pay out asbestos-related claims. Individuals with personal injury claims would have to prove their health was damaged by W.R. Grace products. The trust for these claims would be funded with $512.5 million in cash plus interest at 5.5% from Dec. 21, 2002, 9 million shares of Sealed Air Corp. common stock and W.R. Grace common stock.
The claims for those individuals whose condition does not meet the company's medical criteria would be funded with warrants exercisable for such number of shares of W.R. Grace common stock that, when added to the shares issued directly to the trust on the effective date, would represent 50.1% of the voting securities of W.R. Grace. If the common stock issuable upon exercise of the warrants is insufficient to pay all of these claims, then W.R. Grace would be obligated to pay any extra liabilities in cash.
W.R. Grace wants a Dec. 20 hearing on the disclosure statement.
The company filed for bankruptcy on April 2, 2001. Its Chapter 11 case number is 01-01139.
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