OUTLOOK '13: US WR Grace seeks exit from bankruptcy protection

07 January 2013 16:08  [Source: ICIS news]

HOUSTON (ICIS)--US-based catalyst producer WR Grace expects to emerge from bankruptcy protection in 2013, more than a decade after it filed for Chapter 11.

Meanwhile, another long-standing piece of litigation, an isocyanates price-fixing lawsuit, could also become closer to resolution.

WR Grace filed for bankruptcy protection under Chapter 11 in 2001 after being overwhelmed by asbestos lawsuits.

At the time of its bankruptcy filing, the company faced 65,656 such cases involving 17 property-damage claims and more than 129,000 personal-injury claims.

In January 2011, the US bankruptcy court in Delaware confirmed the company's reorganisation plan, which provided a road map for how it would emerge from bankruptcy protection.

The following year, a US District Court affirmed the ruling from the bankruptcy court.

Despite these milestones, the company continues to operate under bankruptcy protection because litigation is still pending in the Third Circuit Court.  

So far, oral hearings are scheduled for the first quarter, the company said. A ruling could be handed down in the third quarter.

However, the court will issue its ruling on its own timeframe.

In addition to the WR Grace bankruptcy proceedings, another long-running case involving major chemical companies is closer to resolution.

This lawsuit accused Huntsman, Bayer, BASF, Dow Chemical and LyondellBasell of fixing prices for propylene oxide (PO)–based polyether polyols; methyl di-p-phenylene isocyanate (MDI); and toluene di-isocyanate (TDI) that were purchased between 1 January 1999 and 31 December 2004.

The lawsuit was filed in 2004 in US District Court in Kansas.

In 2006, Bayer agreed to pay $55.3m (€42m) to settle the suit's allegations against it.  

In 2011, Huntsman agreed to pay $33m and BASF agreed to pay $51m. LyondellBasell managed to settle the case for nothing.

The court has approved all of the settlements, leaving Dow Chemical as the lone producer fighting the class-action lawsuit.

The trial is scheduled to begin 23 January.

Some of the plaintiffs in the isocyanates lawsuit are themselves defendants in another price-fixing case.

In this case, the defendants used isocyanates to make polyurethane (PU) foam, which was then sold to bed and furniture makers.

In the lawsuit, the foam producers are accused of fixing prices for finished polyurethane foam.

So far, one of the foam makers has reached a settlement. Under it, Vitafoam would pay up to $15m. In settling the lawsuit, Vitafoam denied all allegations that it had done anything wrong.

The charges against foam producers Otto Bock and Plastomer were dismissed.

Valle Foam, one of Canada’s largest PU foam producers, has filed for creditor protection.

Others foam makers entangled in the lawsuit include Carpenter, Flexible Foam Products, Future Foam, FXI - Foamex Innovations, Hickory Springs Manufacturing, Leggett & Platt, Mohawk Industries, Scottdel and the Woodbridge Group.

($1 = €0.76)


By: Al Greenwood
+1 713 525 2645



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