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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 30, 2002
SEALED AIR CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Delaware 1-12139 65-0654331
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(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Incorporation) Identification No.)
Park 80 East
Saddle Brook, New Jersey 07663-5291
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(Address of Principal Executive Offices) (Zip Code)
201-791-7600
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(Registrant's telephone number, including area code)
Not Applicable
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(Former Name or Former Address, If Changed Since Last Report)
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Item 9. Regulation FD Disclosure.
Sealed Air Corporation (the "Company") issued the following press
release on July 30, 2002:
SEALED AIR CORPORATION COMMENTS ON RULING
SADDLE BROOK, N.J., Tuesday, July 30, 2002 - Sealed Air Corporation
(NYSE:SEE) reported today that the federal court overseeing the W. R. Grace
bankruptcy proceeding, which will hear the September 30, 2002 trial of
fraudulent transfer claims against Sealed Air Corporation, issued a ruling on
the legal standards applicable to the trial. Subject to certain limitations, the
ruling held that post-1998 asbestos claims should be included in the solvency
analysis of W. R. Grace. Sealed Air issued the following statement:
"The 1998 transaction by which the Cryovac business of
Grace was combined with Sealed Air was an arm's-length
transaction negotiated in good faith between two
independent companies after considering all relevant
issues including Grace's solvency under applicable law.
We are disappointed with the interim pre-trial ruling on
the legal standards to be applied at the September 30th
hearing, and we will seek a prompt appeal of this
decision."
Sealed Air Corporation is a leading global manufacturer of a wide range
of food, protective and specialty packaging materials and systems, including
such widely recognized brands as Bubble-Wrap(R) air cellular cushioning,
Jiffy(R) protective mailers and Cryovac(R) food packaging products. For more
information about Sealed Air Corporation, please visit the Company's website at
www.sealedair.com.
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Certain statements made by the Company in this press release may be
forward-looking statements. These statements include comments as to future
events and trends affecting the Company's business, which are based upon
management's current expectations and are necessarily subject to risks and
uncertainties, many of which are outside the control of the Company.
Forward-looking statements can be identified by such words as "expects,"
"intends," "plans," "estimates" and similar expressions. Actual results may
differ materially from these expectations due to a number of factors, including
changes in economic, business and market conditions in the geographic areas in
which the Company conducts business, factors affecting customers, raw material
costs and legal proceedings, including those related to W. R. Grace & Co. A more
extensive list and description of these factors can be found under the heading
"Forward-Looking Statements" in Management's Discussion and Analysis of Results
of Operations and Financial Condition, which appears in the Company's most
recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and in the
Company's other publicly available filings with the Securities and Exchange
Commission.
The Company issued the following press release on August 1, 2002:
SEALED AIR HOLDS INVESTOR CONFERENCE CALL
SADDLE BROOK, N.J., Thursday, August 1, 2002 - Sealed Air Corporation
(NYSE:SEE) held a conference call today to address concerns related to a recent
ruling on the legal standards to be applied in the September 30th trial of
fraudulent transfer claims against the Company. William V. Hickey, President and
CEO, delivered the following remarks:
"Good morning. Yesterday, after the dramatic downward pressure on
Sealed Air stock over the last two days, we concluded that we needed to hold a
conference call with our shareholders. Many of you have called to offer support
and encouragement, and urged us to schedule a call. But we weren't sure what we
could say at this stage in the legal process.
There will be some limits on what I can say this morning because of the
pending lawsuit and I will not be able to take any questions during this call,
but I do want to share my personal views and commitments with you today.
I have deep concern and sympathy for the victims of asbestos. Many of
us know friends and family that have been victims of asbestos. I also have deep
concern for the shareholders and the 17,000 employees of Sealed Air, many of
whom are also shareholders who have seen the value of their investments, their
life savings and their retirement funds plummet.
I want to speak to you today not just as CEO of Sealed Air, but also as
an employee and as a shareholder. I don't have any stock options. I own the
stock. In fact, I have retained over 80% of all the equity compensation I have
received over the last twenty years.
Let me remind you I am not a lawyer, so I will not go into the legal
details of this case. However, for the benefit of those who may not have kept up
with the case or for our newer shareholders, I will briefly cover the background
of the case.
For nearly thirty years, Sealed Air and Cryovac admired each other's
business achievements. Each business built a leadership position in different
segments of the packaging industry. Sealed Air in Protective Packaging and
Cryovac in Food Packaging. Over the years there were several attempts to put the
businesses together to create a world class packaging company. None of the
earlier attempts succeeded, but in 1998 we were able to separate the Cryovac
business from W. R. Grace and put the two businesses together in Sealed Air
Corporation. As part of that transaction, W. R. Grace, which had asbestos
liabilities for many years, retained the asbestos liabilities and a profitable
specialty chemicals business. Grace also agreed to indemnify Sealed Air for any
claims made against Sealed Air or Cryovac. After all, neither the Sealed Air
business nor the Cryovac business ever made or sold asbestos.
Following the bankruptcy of W. R. Grace in April, 2001, two committees
of asbestos plaintiffs have sought to show that the Cryovac transaction was a
fraudulent transfer. For the non-lawyers among us, myself included, the
fraudulent transfer laws are an important part of our legal system to prevent
people or companies which owe money, or have liabilities, from transferring
their assets and leaving themselves insolvent so that their creditors cannot get
the assets in settlement of their claims. In the Cryovac transaction we strongly
believe this not to be the situation. As we have said before, the Cryovac
transaction was an arm's-length transaction between two companies for a very
valid business purpose. Before we completed the transaction, we did our due
diligence to make sure that it made sense on every level.
At the trial that is set to start on September 30th, the plaintiffs
have to show that Grace was insolvent or became insolvent as a result of the
Cryovac transaction. If they can't show that, then Sealed Air prevails.
Late Monday there was a ruling issued with respect to the standards to
be applied at the September 30th hearing. There has obviously been a great deal
of activity in our stock over the last
couple of days as a result of the ruling and I want to sort out the truth from
some of the fiction I've been hearing.
First of all, let me just say to all of our investors, customers,
employees, and friends. We're still the same company we were three days ago. We
are operationally strong, with strong cash flow and quality product lines that
provide unique packaging solutions.
I think there has been a great over-reaction to the ruling issued on
Monday. The fact is that the trial of the issues is far from over; in fact, it
hasn't even begun. Monday's ruling was one of a number of preliminary, pre-trial
rulings. It does not decide the merits of the case. There is still going to be a
trial, where the facts and arguments involved in this issue will be fully aired
and analyzed. What the court ruled on was the legal standard to be applied to
the question of Grace's solvency. The judge did not determine whether Grace was
solvent or not. The judge certainly did not determine that the Cryovac
acquisition was a fraudulent transfer. This preliminary ruling was one of many
that may occur on the road to a final ruling.
But let me repeat that Monday's decision unexpectedly dismissed our
arguments and was a real disappointment to Sealed Air. We think that different
legal standards apply, and we believe that the appeals court will see it our
way. Usually, you can't appeal an issue until a final decision - which in this
case would mean after trial. However, in some special circumstances, it's
possible to appeal a ruling before you get to a final decision, but you first
have to get permission to appeal. That's what we're pursuing now.
Now, let's talk about the issue of Grace's solvency. When we did the
due diligence before the transaction closed in 1998, solvency analyses of Grace
were conducted. Outside experts concluded that Grace was solvent by a large
margin, even taking future potential liabilities into account. We would not have
completed the acquisition without that comfort.
Which brings us back to Monday's ruling. What was before the court is
the legal standard to be used to determine Grace's solvency. We believe that the
law requires an analysis of whether Grace was solvent based on what was known or
reasonably expected at the time of the transaction.
That means, you look at all the assets and liabilities of Grace -- including
future liabilities that could reasonably be projected at the time. By that
standard, we believe Grace was solvent by a wide margin. The other side claims
that you can use the benefit of hindsight -- that you look not only at current
and projected liabilities as reasonably understood in 1998, but also at
liabilities that may have arisen after the transaction was completed -- even
years after. And the plaintiffs want that potentially larger figure to be used
for the purpose of determining whether Grace was solvent back in 1998. The
ruling Monday basically accepted the plaintiffs' argument that you may use the
benefit of hindsight to determine solvency.
We hope to file papers seeking to appeal that ruling by the end of
today. If we don't get the opportunity to appeal this ruling now, we will go to
trial. We'll put on our best case, and if we don't prevail, we will be able to
appeal this issue then.
I think it's important to understand what this ruling means not only
for Sealed Air, but for the wider business community. Basically, as we argued in
our briefs to the court, this ruling could adversely affect many commercial and
corporate transactions. Many parties to transactions have potential liabilities,
and thorough due diligence should be sufficient to determine solvency, just as
Sealed Air did in the Cryovac transaction.
Businesses shouldn't have to worry that years later, that somehow the
deal could be challenged or undone in light of subsequent events. We are
confident that this is not, and should not be, the correct view of the law. We
expect that the Third Circuit Court of Appeals will recognize this, and that's
why we are seeking an immediate appeal of this interim, pre-trial ruling.
As we have said before, we think the hearing set to begin on September
30th will go a long way toward addressing the issues we face regarding whether
Sealed Air has any liability connected to the Cryovac acquisition.
Some of you may have already seen the Dow Jones headline on the
Standard and Poor's press release yesterday and I would encourage everyone
listening today to read the entire press release which talks at length about the
many strengths of the Company.
I remain committed to the value of this Company, the security of our
employees, the needs of our customers and the rights of our shareholders and our
other constituents around the world.
We look forward to the start of the trial and a resolution of this
issue. We expect to prevail. We will be here selling Bubble-Wrap(R) Cushioning
and Cryovac(R) Food Packaging long after these issues are resolved. We will keep
you updated. That concludes my remarks. Thank you for joining us this morning."
Sealed Air Corporation is a leading global manufacturer of a wide range
of food, protective and specialty packaging materials and systems, including
such widely recognized brands as Bubble-Wrap(R) air cellular cushioning,
Jiffy(R) protective mailers and Cryovac(R) food packaging products. For more
information about Sealed Air Corporation, please visit the Company's website at
www.sealedair.com.
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Certain statements made by the Company in this press release may be
forward-looking statements. These statements include comments as to future
events and trends affecting the Company's business, which are based upon
management's current expectations and are necessarily subject to risks and
uncertainties, many of which are outside the control of the Company.
Forward-looking statements can be identified by such words as "expects,"
"intends," "plans," "estimates" and similar expressions. Actual results may
differ materially from these expectations due to a number of factors, including
changes in economic, business and market conditions in the geographic areas in
which the Company conducts business, factors affecting customers, raw material
costs and legal proceedings, including those related to W. R. Grace & Co. A more
extensive list and description of these factors can be found under the heading
"Forward-Looking Statements" in Management's Discussion and Analysis of Results
of Operations and Financial Condition, which appears in the Company's most
recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and in the
Company's other publicly available filings with the Securities and Exchange
Commission.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
SEALED AIR CORPORATION
By: /s/ MARY A. COVENTRY
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Name: Mary A. Coventry
Title: Vice President
Dated: August 1, 2002