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Potential Fines Stemming From Criminal Trial Could Jeopardize Asbestos Trust

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Jury selection will begin today in the criminal trial against W.R. Grace concerning the alleged contamination of Libby, Montana with asbestos. 1,200 people in the area have said to have been stricken ill or to have died as a result of asbestos contamination.

If W.R. Grace, who is going through the process of reorganization through bankruptcy, is found guilty, the company could face fines of up to 0 million or more. The fine could actually disrupt the bankruptcy and threaten a .4 billion trust fund to be set up for people who have been injured by asbestos. The fund is at the center of Grace’s reorganization. “A large enough fine would upset any Chapter 11 plan because it is going to mean dollars out the door,” said bankruptcy attorney Evan Flaschen, with Bracewell & Giuliani LLP, who isn’t involved in the case.”

The charges against W.R. Grace and six of its former executives are conspiracy, violating the U.S. Clean Air Act and obstruction of justice. The six former executives could between 5 and 15 years in prison if convicted. W.R. Grace and all six of the former executives have pleaded not guilty.