W. R. Grace and Company

There are two accounts of the incorporation date of W. R. Grace & Co. According to a New York Times account, the company was incorporated as part of estate and successor planning, in 1895. The three brothers consolidated most of their holdings into a new private company, incorporated in West Virginia, called W. R. Grace & Company. The consolidation involved W. R. Grace & Co. of New York, Grace Brothers & Co. of Lima, Peru, Grace & Co. of Valparaiso Chile, William R. Grace & Co. of London, and J. W. Grace & Co of San Francisco.[9]

According to its website, W. R. Grace & Co. was incorporated in Connecticut in 1899. The listed capital of $6 million did not include Grace Brothers & Co. Limited in London or its branches in San Francisco, Lima and Callao, Peru, nor in Valparaiso, Santiago, and Concepción, Chile.[10]

J. Louis Schaefer, who joined the company as a boy, played a key role in not only W. R. Grace & Company, in which he became a vice president, but also as president of Grace National Bank. Schaefer was a co-executor of the estate of Michael Grace with William's son and corporate successor, Joseph P. Grace. J. Louis Schaefer died in 1927.[11]

Grace Line WWII poster

For most of its history, Grace's main business was cargo shipping. To get cargo from Peru to North America and Europe, including guano and sugar, and noticing the need for other goods to be traded, William Grace founded a shipping division.[5] Grace Line began service in 1882,[12] with ports of call between Peru and New York. Regular steamship service was established in 1893, with a subsidiary called the New York & Pacific Steamship Co., that operated under the British flag. Ships built outside the United States prior to 1905 were banned from US registry. US-flag service began in 1912 with the Atlantic and Pacific Steamship Company. The activities of both companies and the parent firm were consolidated into the Grace Steamship Company beginning in 1916. The firm originally specialized in traffic to the west coast of South America; then later expanded into the Caribbean.

In 1916, Grace acquired a controlling interest in the Pacific Mail Steamship Company. In 1921, Pacific received five 535 ft. President class ships from the United States Shipping Board for transpacific operation. In 1923, the US Shipping board decided to place the five ships up for bid and Dollar Shipping Company won the bid. With no large ships for the transpacific operations Grace sold the Pacific Mail, its registered name, and goodwill to Dollar. Now without a transpacific service, Grace did not need the six intercoastal freighters and sold them off to the American Hawaiian Line. At this time Grace formed a new entity, the Panama Mail Steamship Company, to operate the smaller ships that were formerly owned and used by the Pacific Mail in the Central American trade. These ships were not involved in the sale to Dollar.[13]

On the death of William R. Grace in 1904, he was succeeded by William L. Sauders as company president followed by Joseph Peter Grace, Sr. (1872–1950) who became president in 1907. In 1938 the Colombian Line merged with Grace Line bringing an end to the Colombian Line.[14] During World War II Grace Lines operated numerous transports for the U.S. War Shipping Administration.[15]

J. Peter Grace, Jr. took over management of the company after his father suffered a stroke in 1945. After the war the Grace line operated 23 ships totaling 188,000 gross tons, and an additional 14 more on bareboat charters. In 1954 the company bought Davison Chemical Company (founded by William T. Davison as Davison, Kettlewell & Company in 1832), and the Dewey & Almy Chemical Company (founded in 1919 by Bradley Dewey and Charles Almy).

In 1960 Grace Line, inspired by the pioneering efforts of Sea-Land Service, Matson Navigation, and Seatrain Lines, sought to begin containerizing its South American cargo operations by converting the conventional freighters Santa Eliana and Santa Leonor into fully cellular container ships. However, the effort was stymied by the opposition of longshoremen in New York and Venezuela and the ships were repeatedly laid up idle and were ultimately sold to the domestic container line Sea-Land Service in 1964.[16][17] In 1963 Grace made a second attempt to containerize its South American trade when it ordered the four M-class combination passenger-cargo ships Santa Magdalaena, Santa Maria, Santa Mariana and Santa Mercedes with partial cellular holds, but they were no more successful as mixing conventional break-bulk cargo and containers in the same ship negated the operating economies that full containerization promised.[18]

The company bought a 53% stake in Miller Brewing in 1966, for $36 million; Lorraine Mulberger sold the stake for religious reasons.[19] It sold the Miller stake in 1969 to Philip Morris for $130 million, topping a deal with PepsiCo for $120 million.[20][21][22]

In 1969 Grace decided to exit the shipping business to concentrate on its chemical and diversification ventures. Grace Line was sold and merged into Prudential Line in 1970, which was renamed Prudential Grace Line, and was itself in turn taken over by Delta Steamship Lines in 1978, thereby extinguishing the name Grace in ocean shipping.[23] Subsequently, Delta Steamship Lines was itself acquired and consolidated by Crowley Maritime in 1982.

In 1974 the Peruvian government took ownership of the properties of W. R. Grace & Co., Harold Logan, Grace executive vice president, stated the company would join in governmental level talks over compensation of expropriated American concerns. The loss of Grace's properties in Peru began in 1969, when 25,000 acres of sugarcane plantations were taken over in an agrarian reform. The sugar lands were at Paramonga, 110 miles north of Lima, and at Cartavio, near Trujillo, 200 miles farther up coast. Grace retained small mining operations producing copper, tin and silver, in southern Peru, about 100 miles north of Juliaca. Jose E. Flores, head of W. R. Grace S.A. Peru, closed the mining operations for Grace in Latin America when the government of Peru nationalized the remaining interests.[24] In 1987, by building a can sealant plant in Shanghai, Grace became the first wholly foreign-owned company to do business in The People's Republic of China.

In 1928, Grace and Pan American Airways jointly formed Pan American-Grace Airways known as Panagra, establishing the first air link between the North and South America, that began operation in 1929.[25]

While Grace no longer makes asbestos-related products, W. R. Grace and Company has faced more than 270,000 asbestos-related lawsuits, of which 150,000 have been settled or dismissed and 120,000 remain.[39]

On April 2, 2001, Grace and its subsidiaries in United States filed voluntary petitions for Chapter 11 Bankruptcy reorganization in Bankruptcy Court for the District of Delaware.[40] The company was trying to find the resolution through federal court-supervised reorganization in response to the quickly growing number of asbestos-related bodily injury claims.[41]

On September 19, 2008, Grace filed a revised plan of reorganization to the same court, jointly by the asbestos injury claimants.[42] In January 2011, the court issued an order in favor of the new plan[43] and in January 2012, the court denied all appeals and affirmed the plan.[44] After a motion for reconsideration, the plan was reaffirmed on June 11, 2012.[45][46]

On February 3, 2014, Grace emerged from this asbestos-related Chapter 11 bankruptcy which took more than 12 years.[47][2] Under the plan of reorganization approved by the court, all parties filings the asbestos-related claims should direct their inquiry to either an asbestos personal injury trust or a separate asbestos property damage trust.[48]

• The movie A Civil Action, starring John Travolta, was based on the Grace groundwater contamination lawsuits in Woburn, MA.
• The PBS television show P.O.V., which highlights independent films, in August 2007 premiered the movie Libby, Montana that documents the thousands of people in Libby, Montana, that have been exposed to and are suffering the effects of exposure to asbestos. The show also discusses the criminal indictments of many Grace executives for covering up the asbestos related illnesses and deaths.
• PBS also aired Dust to Dust, a documentary produced by Michael Brown Productions, Inc. in 2002. "Dust to Dust" reports on the more than 200 people who have died from asbestos exposure in Libby, Montana. The film focuses on the plights of several of these individuals and the damage done over almost 30 years while the mine was operated by W. R. Grace.
• NPR ran a piece on their show All Things Considered discussing the criminal charges against W. R. Grace. A U.S. attorney general alleges that the company and managers of the mine in Libby, Montana, knew about the dangers of the asbestos they were dumping into the air for over 20 years.[49]
• On February 19, 2008, the NPR-produced radio show Here and Now broadcast a story about the film Libby, Montana, which details the asbestos contamination in the town of that name.[50]
• On April 22, 2009, the television and radio program Democracy Now! broadcast two segments on the trial of W. R. Grace and some of its employees related to the asbestos contamination in Libby, Montana.[51][52] Democracy Now! also broadcast a follow-up interview on May 12, 2009, with activist Gayla Benefield and Andrea Peacock, a Montana independent political and environmental journalist.[53] This interview focused on reactions to the not-guilty verdict in the federal trial, where W. R. Grace and three former executives were acquitted on charges of knowingly exposing workers and townspeople to asbestos, and subsequently participating in a cover-up.