W.R. Grace spent 13 years in Chapter 11 isolating asbestos claims, then re-emerged to grow

W.R. Grace, a Maryland chemical maker, faced more than 100,000 asbestos-related claims and filed for Chapter 11 reorganization in April 2001. The case became one of the longest in U.S. history, dragging through negotiations, settlements and appeals in a Delaware bankruptcy court for nearly 13 years.

Rather than liquidation, the process became a way to contain the asbestos exposure. The joint plan of reorganization that took effect on February 3, 2014 established two trusts that would award more than $4 billion to personal-injury claimants and property owners, while leaving Grace's ongoing chemical businesses to operate.

During the long case Grace kept growing: it made more than 24 acquisitions and its share price rose from $1.52 to more than $90. On emergence, vice president Rich Badmington said the biggest benefit was 'the removal of uncertainty,' allowing the company to focus on 'top-line growth.'

Grace left court protection with the business intact and ~$3B of 2013 revenue, having made 24+ acquisitions while shares rose from $1.52 to $90+.

Asbestos liability threatened to consume the entire company.

Chapter 11 let Grace fund $4B of trusts to resolve claims without ending the business.

The operating units kept running and even acquired 24+ companies during the case.

Emergence removed legal uncertainty so management could focus on sales growth.

For a company buried by legacy claims, Chapter 11 can be a containment tool: fix the liabilities, then spend your energy on the business you can still sell.

Grace emerged from Chapter 11 in February 2014, then in 2016 completed a separation that split off GCP Applied Technologies, leaving Grace focused on its catalysts business. The case remains the landmark example of a company using a long Chapter 11 to insulate a viable operating business from asbestos liabilities rather than liquidating it.