The history of W.R. Grace & Co.

The history of W.R. Grace & Co.

Thursday, November 18, 1999

W.R. Grace Co. had a not-so-fragrant beginning in 1854. William R. Grace, who had fled the Irish potato famine for Peru, chartered ships to trade bat guano and bird droppings.

Twelve years later, he moved his headquarters to New York and set up a worldwide network trading fabric, fertilizer, machinery and other products.

In the middle of World War II, William Grace's grandson, Peter, took over control of the company and ran it for almost a half century, until 1993.

Although the company's focus remained on chemicals and packaging, Peter Grace diversified Grace into everything from sporting goods to tacos.

Starting in 1995, Grace divested many of its larger businesses.

In 1998, the Securities and Exchange Commission sued Grace for manipulating earnings in one of its divisions. To settle the suit, Grace set up a $1 million financial education fund.

Grace has gone through elaborate reorganization in the past decade.

Lawyers handling the asbestos suits against Grace say the shuffling was done to conceal assets and cloud the corporate lines of responsibility. Grace denies the charges and calls the moves "solid business decisions."

Although it has downsized, Grace's sales are still about $1.4 billion a year.

But like other giant companies that sold asbestos products during the heyday of the flameproof fiber, Grace is still plagued by lawsuits filed by people allegedly harmed or killed by the fibers in the insulation, garden products and other applications it sold.

More than 250,000 asbestos-related suits have been filed against Grace.

Almost all of them except the 187 involving the miners and the families from Libby are personal-injury suits dealing with the hazards of asbestos products, said Jay Hughes, Grace's top litigation counsel.

About 150,000 suits have been settled or dismissed. An estimated 102,000 cases remain, he said.

A spotlight was thrown on one of Grace's darkest moments when the movie "A Civil Action" was released in January.

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John Travolta in "A Civil Action." �

John Travolta and Robert Duvall dramatized the book of the same name written by Jonathan Harr. The book told the story of families living in the old New England mill town of Woburn on the outskirts of Boston.

Five Woburn children and one adult died of acute lymphocytic leukemia from exposure to chemicals in their drinking water. Others were sickened. Grace and another company were found by the Environmental Protection Agency to be responsible for dumping the toxic chemicals that poisoned two of Woburn's wells.

Grace paid $8 million to eight families in return for the withdrawal of lawsuits they had filed.

Later, Grace was indicted by the Department of Justice on two counts of lying to the EPA in 1982 about the amount of hazardous chemicals it used at its Woburn plant. In 1988, Grace pled guilty to one count and was fined the maximum -- $10,000. Today, the penalty for that charge is $500,000.