W.R. Grace & Company Asbestos Trust

Tens of millions of homes in the United States are lined with poisonous insulation from the Libby mine. When the asbestos in a building is disturbed, even by simple restorations, such as installing a ceiling fan, fibers break off into the air where they are be inhaled by residents.

As early as the 1920s, physicians recognized that exposure to asbestos caused severe sickness when asbestosis was identified by British medical journals. At the same time, insurance companies in the United States and Canada stopped selling life insurance to asbestos workers.

Moreover, safer substitutes for most asbestos uses were known as early as the 1930s. Nevertheless, W.R. Grace chose to protect its substantial profit margins rather than discontinue use of the toxic mineral. W.R. Grace was, notoriously, the subject of a book and film called “A Civil Action.” This story is based on the lawsuits of residents of Woburn, Massachusetts. Residents of Woburn, a small suburb of Boston, noticed high rates of leukemia. Scientists from Harvard University concluded that the leukemia was the result of W.R. Grace’s practice of dumping chemicals in the water supply. W.R. Grace settled the suit with the people of Woburn for $8 million in an out-of court settlement.

More recently, Libby, Montana, has brought into light W.R. Grace’s unconscionable corporate practices. In 1963, W.R. Grace bought the mine in Libby, Montana. Corporate records within W.R. Grace show that early in the 1970s the company’s officers knew that the vermiculite was contaminated with asbestos and that Libby residents were dying. Federal prosecutors criminally indicted executives from W.R. Grace on a number of charges related to covering up the dangers of asbestos. Most of the judge’s evidentiary rulings were overturned on appeal. Nevertheless, executives were acquitted in 2009. Still, many in Libby feel justice had not been served.

Soon after, the Environmental Protection Agency required W.R. Grace to pay a $250 million fine to reimburse the federal government for cleanup in Libby. That amount is the largest fine in history by the Environmental Protection Agency’s “Superfund” program. Bizarrely, when the E.P.A. requested documents from the company, the company mailed the documents to the E.P.A., which were covered in asbestos powder.

Because of these claims, the company filed for bankruptcy protection in 2001. Shortly before filing, the company transferred several billion dollars to spin-off companies as an attempt to protect itself from civil suits. The Justice Department found this to be a fraudulent transfer of funds, and the courts ordered that over $1 billion be returned to the company to be used to pay off the debts. As part of the bankruptcy proceedings, W.R. Grace has been ordered to set up a $4 billion trust to help compensate the victims of asbestos exposure.