In March 2023, the U.S. Bankruptcy Court for the District of Delaware entered a settlement agreement Libby Asbestos Settlement Agreement that resolved the remainder of DEQ’s amended proof of claim in W.R. Grace’s Chapter 11 bankruptcy case for the Libby Asbestos Superfund Site. The settlement resolves the natural resource damage liability of Grace and other affiliated companies to the State of Montana for the Libby Asbestos Superfund Site and requires Grace to provide the State with financial assurance for the KDID, amongst other provisions.

The settlement agreement included $18.5 million (plus interest) in natural resource damages to be paid to the State over 10 years. The first $5 million is due to the State September 19, 2023, and the rest is to be paid out in $1.5 million annual installments (plus 4.19% interest) for 9 years. In exchange, the State releases all natural resource damage claims, except in the event of catastrophic failure of the KDID.

As required by the settlement, the money must be used, “solely to restore, replace, rehabilitate, or acquire the equivalent of injured natural resources and services in or related to OU3 or the Lincoln County area, and support therefor, including costs for State restoration plan development and implementation, and administrative, program, legal, technical, and all other related costs, to the extent lawful under CERCLA or CECRA…”

The money cannot be spent on the on the CERCLA response actions (cleanup) at the Libby Asbestos site. Those actions must be performed by W.R. Grace for OU3, and the EPA and DEQ settlements for the other operable units. This settlement cannot be used for any future DEQ cost-share or operation and maintenance obligations under CERCLA.