WILMINGTON, Del. - (Mealey's) After a hearing Jan. 10, the bankruptcy judge overseeing W.R. Grace & Co.'s Chapter 11 case in a Delaware bankruptcy court approved an $84 million settlement between the company and a group of insurers to resolve asbestos-related liability coverage disputes (In re W.R. Grace & Co., et al., No. 01-1139, D. Del. Bkcy.).
Bankruptcy Judge Judith K. Fitzgerald approved the settlement between W.R. Grace & Co. and insurers Continental Casualty Co. and Continental Insurance Co. on their behalf and on behalf of the CNA Cos.
In April 2001, W.R. Grace and 61 related entities (collectively, W.R. Grace) filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. The CNA Cos. issued policies to W.R. Grace that provide or are alleged to provide insurance coverage for asbestos-related claims. The policies include three primary liability policies and 16 high-level excess policies. The excess policies provide a total of approximately $158 million in aggregate limits for products/completed operations. All 16 high-level excess policies attach at or above $75 million in excess of primary coverage.
The parties have been engaged in multiple coverage litigations over the past 25 years and have previously entered into five separate agreements, but significant coverage issues remained in dispute.
Following negotiations, the CNA Cos. agreed to pay $84 million to the Asbestos Personal Injury Trust in seven annual installments. The agreement resolves all disputes relating to any alleged remaining coverage and other obligations of the CNA Cos. as well as any alleged obligations of W.R. Grace.
The settlement has the support of the asbestos personal injury future claimants representative and the Asbestos Personal Injury Committee. However, a group of claimants injured by exposure to asbestos from W.R. Grace's operations in Lincoln County, Mont., (the Libby claimants) objected to the settlement, saying, in part, that the settlement purports to take away from them insurance coverage in which they have vested rights under non-bankruptcy law.
[Editor's Note: Full coverage will be in the January issue of Mealey's Asbestos Bankruptcy Report. For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]
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