Asbestos Names Jump Up With Sealed Air Settlement
Asbestos-related names such as W.R. Grace, Federal-Mogul, and Owens Corning jumped after Sealed Air Corp. reached a settlement with asbestos claimants in connection with its packaging division, Cryovac. Traders said $10-15 million pieces of W.R. Grace changed hands in the mid-60s, up about 10 points. Federal Mogul traded at 64, up from the high 50s where it had been moving earlier this month, and Owens Corning traded in the 62-63 context. Amounts on those trades could not be determined.
The settlement calls for Sealed Air to contribute nine million shares of its common stock and $512.5 million in cash plus interest to the asbestos claims, which are actually against W.R. Grace. Sealed Air was connected to W.R. Grace's asbestos claims after buying Cryovac in 1998 from W.R. Grace. Sealed Air was being sued by asbestos plaintiffs who claimed that W.R. Grace fraudulently transferred the packaging division in an effort to shield it from asbestos litigation. The allegation is that Cryovac assets should go to the asbestos claimants, explained a source familiar with the situation.
The shares of stock and cash are likely to be placed in a trust under 524g of the U.S. bankruptcy code, although W.R. Grace does not have a reorganization plan in place. A spokesman for the company could not speculate as to when W.R. Grace would complete its plan.Robert Tarola, W.R. Grace cfo, and David Kelsey, Sealed Air cfo, could not be reached by press time.
About a month ago, asbestos related names got a boost from the news that Armstrong Holdings had gained the support of its asbestos personal injury claimants committee for its reorganization plan. At that time, traders said that small pieces of Federal-Mogul traded in the 58-59 context, and Owens Corning moved in the 57-58 1/2 range (LMW, 11/11).