Lawyers for Libby asbestos victims are working toward settlements with W.R. Grace & Co., BNSF Railway Co. and certain insurance companies in what Grace has deemed a “global resolution.”

The settlements would give victims varying amounts of financial compensation for exposure to toxic asbestos dust linked to the former Grace vermiculite mine near Libby.

Since the extent of the disease and death caused by asbestos exposure came to light in late 1999, the Center for Asbestos Related Diseases clinic in Libby has acquired a caseload of more than 2,800 patients and has continued to add new patients.

Grace filed for Chapter 11 reorganization in 2001 in response to a growing number of asbestos claims. An Asbestos Personal Injury Committee was set up as part of the reorganization.

Compensation for victims has been a long time coming, and there’s no indication of when the settlements will be finalized.

Negotiations have continued for years with Grace, the railroad and related insurance companies. Because of the differences in exposure dates and other factors, not all claimants are in all of the forthcoming settlements.

The latest round of settlements is separate from a $43 million payout from the state of Montana approved by the courts a year ago.

The law firms of McGarvey, Heberling, Sullivan & McGarvey in Kalispell and Lewis, Slovak, Kovacich & Marr in Great Falls have taken the lead in the settlement negotiations. Those attorneys say they are bound by confidentiality agreements with their clients not to divulge the details of deals in the works. They also have advised their clients not to share confidential information with anyone.

Paperwork filed in the U.S. Bankruptcy Court for the District of Delaware by Grace outlines some measure of detail in a four-part “global deal.”

The Grace portion of the global settlement deal involves Grace’s agreement to fund the Libby Medical Program with $19.5 million, then terminate the medical program and transfer the money to a local Libby Medical Plan Trust that will accept all current members of the program. That deal was announced in January.

Under the settlement, Libby claimants are obligated to withdraw their objections to Grace’s bankruptcy plan, according to Bankruptcy Court documents. Essentially this puts an end to the litigation between Libby claimants and Grace.

An advisory board of local residents with asbestos disease will assist Francis McGovern, who has been named the independent trustee of the trust, court documents said.

Grace voluntarily created the Libby Medical Program in 2000 to provide coverage for certain asbestos-related illnesses, and could have terminated the program at any time. The company currently pays more than $2 million annually in health-care expenses for the program, court documents said.

Once the trust is set up, one of the first steps will be to admit into the new plan all of the clients with asbestos-related disease diagnoses.

Separate from the transfer of the Libby Medical Program to the trust, claimants will be eligible to receive distributions from the Asbestos Personal Injury Trust that’s being established through the Grace plan of reorganization.

IN THE SETTLEMENT of BNSF Railway Co.’s claims against Grace and the Asbestos Personal Injury Trust, including its claims for contractual indemnity and in exchange for the railroad’s release of those claims, the Asbestos Personal Injury Trust will pay BNSF the liquidated sum of $8 million, according to Bankruptcy Court documents filed by Grace.

Like Grace, the railroad company has been the target of numerous lawsuits brought by Libby residents for asbestos-related injuries allegedly caused by the railroad’s operations in the Libby area. BNSF has asserted it is entitled to complete indemnity, court documents stated.

According to information obtained by the Daily Inter Lake from an asbestos claimant, BNSF has outlined a distribution grid itemizing the estimated amount of money claimants with asbestos disease will get in an initial distribution, depending on the severity of their illness.

Victims with severe asbestos disease would get $49,600, while those with mesothelioma — a rare form of lung cancer linked to asbestos exposure — would get $67,392. Those diagnosed with “moderate” asbestos disease would get roughly $41,000, according to the distribution grid.

A second distribution eventually would be made, but the last $5 million won’t be delivered until the $2.9 billion Grace Asbestos Bankruptcy Trust is funded, the distribution information indicated.

A THIRD PRONG of the global deal involves some of BNSF’s insurers, namely CNA, Maryland Casualty Co. and Arrowood Indemnity Co.. That portion of the settlement resolves the Libby claimants’ claims against those insurance companies in return for settlement payments.

Maryland Casualty serviced the Grace mine and mill from 1963 to 1973 and CNA from 1973 to 1994.

As part of the resolution, which is funded in part by CNA, Maryland Casualty and Arrowood, the Libby claimants must withdraw their appeals and objections to Grace’s insurance settlements with CNA and Arrowood.

The fourth piece of the deal involves the settlement among the Libby claimants and certain Grace insurers “which resolves certain so-called ‘insurer wrong-doing claims,’” court documents said.

Features editor Lynnette Hintze may be reached at 758-4421 or by email at lhintze@dailyinterlake.com.