“Mass tort” and Chapter 11 are words that have frequently been used together since Johns-Manville filed for bankruptcy back in 1982. Now, as of April 7, there has been a settlement in principle of many but not all of the asbestos issues remaining in the W.R. Grace asbestos bankruptcy. The “spinners” are all hard at work on characterizing the settlement, and I’m reading with interest to see what others have to say. For now, I’m simply going to note some of the spins and add some small comments.
An April 12, 2008 WSJ editorial merits mention as they declare the settlement a good deal for Grace, with Grace said to have paid $ 2.5 billion on a $ 6 billion demand. More than the numbers, the WSJ praises Grace for having blazed a legal trail:
“By making a solid legal case that bankruptcy courts have an obligation to delve into the legitimacy of tort claims, W.R. Grace has provided a road map to other companies that want to fight dubious suits. The company has also sent a message to the plaintiffs bar that it should expect its handiwork to be examined more closely in future bankruptcy cases.”
In my opinion, the praise for trail-blazing is accurate, and the WSJ’s kind words are well deserved by Grace’s inside and outside lawyers, not to mention management in general.