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W.R. Grace Settlement Approval Sought

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W.R. Grace filed with the U.S. Bankruptcy Court a motion for entry of an order approving, authorizing and implementing a settlement agreement between and among the Debtors and the bank lender group. The motion explains, “On the effective date, the Debtors shall transfer the following sums in cash to the agent: (i) $971 million of principal/undisputed interest through December 31, 2013 (the ‘Plan Payment’), (ii) $129 million (the ‘Settlement Payment’) and (iii) interest on the Plan Payment and the Settlement Payment for the period from January 1, 2014 to the Plan Effective Date….Beginning on January 1, 2014 and continuing until the earlier of February 1, 2014 or the Effective Date, simple interest shall accrue on the Plan Payment and the Settlement Payment at the rate of 3.25% per annum. If the Effective Date has not occurred by January 31, 2014, then beginning on February 1, 2014 and continuing until the Effective Date, simple interest shall accrue on the Plan Payment and the Settlement Payment at the rate of 5.0% per annum. To the extent the interest paid pursuant to this section exceeds the Plan Rate; such supplemental interest is paid by the Debtors in settlement of the Debtors’ objection to the Proofs of Claim, the Claims Order Appeal and the Bank Lender Appeals. The Lender Payment shall be in full and final satisfaction of all amounts due and owing under the Pre-petition Credit Facilities, the Proofs of Claim, the Plan, or otherwise.” The motion continues, “The primary purpose of the Settlement Agreement is to eliminate the measure of uncertainty and financial expense inherent in what could be continued complex, protracted litigation concerning the Settled Claims. The Settlement Agreement allows the Debtors to avoid the cost, risk, and distraction associated with such litigation, thereby preserving value for the Debtors’ estates to the benefit of all stakeholders and facilitating the Debtors’ rapid emergence from bankruptcy after nearly thirteen years in chapter 11.”

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