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Zonolite settlement would help with removal costs

Becky Kramer
Staff writer
November 26, 2008

A Spokane attorney has helped negotiate a tentative $140.million class-action settlement with W.R. Grace & Co. over Zonolite Attic Insulation, an asbestos-tainted product installed in millions of U.S. homes.

The settlement would require W.R. Grace to pay as much as $140 million to settle Zonolite claims over the next 25 years, attorney Darrell Scott said Tuesday. The money would go into a trust fund that property owners could tap for 55 percent of the cost of Zonolite removal or related remediation. Most payouts would be capped at $4,125.

When it’s disturbed, Zonolite can release needle-like fibers of tremolite asbestos. The settlement provides “sensible remedies” for people who have to hire specialists to remove the insulation during remodeling or demolition projects, Scott said.

However, “we don’t want people to get overly excited about filing a claim. There’s still work to be done,” said Scott, one of two attorneys appointed to represent Zonolite claimants in W.R. Grace’s bankruptcy case.

In January, a U.S. bankruptcy judge in Delaware will consider the class-action settlement for preliminary approval. Scott said the plan’s ultimate success hinges on whether W.R. Grace, an international chemical company, can emerge from a protracted Chapter 11 bankruptcy. If creditors agree to the company’s reorganization plan, W.R. Grace could be out of bankruptcy by next spring.

W.R. Grace filed for Chapter 11 in 2001 amid mounting lawsuits over asbestos. Zonolite was part of the mix.

The insulation was made from vermiculite mined near Libby, Mont. The Libby deposit contained tremolite asbestos, which is associated with asbestosis and mesothelioma, a rare and fatal cancer of the lungs’ lining.

Earlier this year, W.R. Grace agreed to pay $250 million to clean up contamination in Libby, where asbestosis exposure created an epidemic of lung disease among residents.

On the consumer side, Zonolite was sold as a “do it yourself” insulation in hardware stores for 60 years. W.R. Grace prepared an asbestosis warning label for Zonolite in the 1970s, but never released it. The company stopped selling the product in 1984.

Some of Scott’s clients spent tens of thousands of dollars on asbestos remediation after they unwittingly disturbed Zonolite during remodeling projects, allowing asbestos fibers to filter throughout their homes. But people have become more aware of Zonolite’s dangers, Scott said. Removal costs have also dropped.

“The average cost of removing Zonolite from a home is less than $5,000,” he said.

More than 10,000 U.S. residents filed claims with U.S. Bankruptcy Court this fall, indicating that they had the granular, gray-gold insulation in their attics. The class-action settlement would allow people to file Zonolite claims for up to 25 years, lifting the deadline of Oct. 31, Scott said.

The settlement requires W.R. Grace to pay $60 million into the trust fund over three years. If the fund’s balance drops below $10 million, the company could be liable for additional payments totaling $80 million over the life of the fund.

Some of the money in the fund is also slated for an educational campaign, alerting people that Zonolite should only be removed by certified professionals.

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