A Fall From W.R. Grace

Who's really running W.R. Grace? For now, it may be the 81-year-old whose name is on the front door. Evidence of that came with the Mar. 2 resignation of J.P. Bolduc as CEO of the health-care and chemical giant.

Bolduc, a former consultant, was handpicked by Chairman Peter Grace to run the company. His ouster has riled shareholders. "We're outraged by the fact that...it doesn't appear to be because of his performance," says a fund manager. Indeed, the restructuring Bolduc had wrought since 1990 is working. Operating income rose 22% last year, to $587 million.

In a statement, Bolduc cited "differences of style and philosophy with the company's leadership." The company wouldn't elaborate. But some say the rift may have involved negotiations by Grace's son, Peter III, to buy a Grace restaurant-management unit. The deal was for less than $1 million, but "you had delicate negotiations," says one director, "and Peter Sr. was siding with his son." A former executive says directors hoped for a reconciliation, but ultimately sided with the chairman.

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