W.R. Grace Is Likely to Face Indictment in Montana CaseNov 27, 2004 | Bloomberg News
W. R. Grace & Company, a producer of chemicals and building material that filed for bankruptcy protection in 2001 amid thousands of asbestos-related claims, said yesterday that it might be indicted as a result of an investigation of environmental violations and obstruction of government proceedings at a Montana mine.
"The government is asserting that it has substantial evidence linking the company to the commission of a crime," the company said in a filing with the Securities and Exchange Commission. The company "is likely to be indicted during the first quarter of 2005."
Several current and former senior-level employees have been named as targets of the grand jury investigation at a mine in Libby, Mont., the company said.
From 1963 to 1990, the mine extracted and processed vermiculite that contained asbestos, which can cause cancer and respiratory ailments. The Environmental Protection Agency is removing contaminated soil from Libby.
Grace, which is based in Columbia, Md., said it was "unable to assess" whether the investigation or any subsequent convictions would have "a material adverse effect on the results of operations or financial condition of Grace or affect Grace's bankruptcy proceeding."
Shares of Grace fell 63 cents yesterday, to $13.20.
Grace said on Oct. 29 that it faced an inquiry by a federal grand jury, after being notified by the United States attorney for Montana. The investigation involved possible obstruction of federal agency proceedings, violations of environmental laws and conspiring with others to violate the environmental laws, the company said.
The Justice Department said last year that hundreds of former Libby miners and their relatives had shown symptoms of asbestos-related diseases. The mortality rate from lung cancer in the community was 20 percent to 30 percent higher than expected, the Justice Department said.
Deaths caused by asbestosis, a respiratory ailment, were 40 to 80 times the normal rate, the agency said.
Costs for vermiculite remediation may be as much as $181 million, Grace said in its 2003 annual report. A federal judge in Montana last year ordered Grace to reimburse the E.P.A. $54.5 million plus future costs for its Superfund clean-up program.
Libby property owners filed a class-action suit in 2000 claiming they were harmed by environmental contamination, Grace said.