W.R. Grace & Co. and Sealed Air Corp. lost a court ruling that might make it easier for people alleging asbestos injuries to prove the chemical maker fraudulently sold a food-packaging company to Sealed Air in 1998.
A lawsuit against the companies alleges that Grace transferred its Cryovac division to Sealed Air in 1998 for $1.2 billion and stock in a move to shield assets from plaintiffs seeking payment for asbestos-related injuries.
Attorneys for the plaintiffs say Grace sold Cryovac for less than its actual value, leaving the company unable to pay the potential damages it faced from future asbestos lawsuits.
Grace has said the sale price was fair and that it didn't foresee the subsequent flood of asbestos claims that prompted its bankruptcy filing in April 2001.
But U.S. District Judge Alfred Wolin in Newark, N.J., said Grace should have anticipated those claims when it sold Cryovac.
Shares of Sealed Air fell $15.77, or almost 42%, to $22. Grace shares rose 43 cents to $2.94. Both trade on the New York Stock Exchange.