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GRACE GRANTED RE-HEARING IN ASBESTOS CASE; WILL REVERSE $200 MILLION OF PRIOR CHARGE

 BOCA RATON, Fla., Jan. 12 /PRNewswire/ -- W. R. Grace & Co. (NYSE: GRA) announced today that the United States Court of Appeals for the Second Circuit granted the company's petition for a re-hearing concerning the Court's Sept. 1, 1993 decision relating to when insurance coverage is in force in asbestos property damage suits. In view of the Court's action, Grace will reverse, in the fourth quarter of 1993, $200 million of the after-tax charge it had taken in the third quarter.
 The Sept. 1 decision related to a lower court ruling that Grace's insurance carriers' obligation to defend and indemnify Grace for damages and litigation costs is based on a "discovery of damage" trigger. The Court of Appeals reversed the lower court's ruling and instead adopted a trigger based on the date of installation of asbestos-containing materials.
 In granting Grace's petition, the Second Circuit has asked that new briefs be filed on this issue, as well as on the concept of referring to the New York State Court of Appeals the question of what constitutes asbestos property damage.
 A Grace spokesperson indicated that the court's decision to re-hear the case is the exception rather than the rule. Combined with the ordering of new briefs, it signals that the court will seriously consider modifying its Sept. 1, 1993, decision, which Grace understands has been withdrawn from publication.
 As a result of the Court's Sept. 1, 1993 decision, Grace recorded a special non-cash charge of $300 million after-taxes to reflect a reduction in its insurance coverage for asbestos property damage claims. Grace indicated that its 1993 fourth quarter earnings will be increased by $200 million after taxes by a non-cash credit. The remaining $100 million balance will provide a reserve for certain in-house legal expenses and other uncertainties related to asbestos not covered by insurance.
 -0- 1/12/94
 /CONTACT: Chuck Suits of W. R. Grace, 407-362-2600 or 800-GRACE99/
 (GRA)


CO: W. R. Grace & Co. ST: Florida IN: CHM SU:

AW -- FL010 -- 1569 01/12/94 17:39 EST
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Publication:PR Newswire
Date:Jan 12, 1994
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