For those who have seen the High Plains Films documentary Libby, Montana, today's indictment of W.R. Grace (AMEX:GRA) and seven high-ranking executives is probably not a surprise. The fuss basically pertains to whether the company knowingly exposed miners and townspeople to airborne asbestos particles stirred up by its vermiculite mining operation. Though the stock had been rising on hopes of a favorable asbestos settlement, this new spate of indictments could have the company wheezing for some time to come.

The company's Feb. 7 press release on the indictments starts by saying the company is responding to news stories because the U.S. Department of Justice released the indictment to the media first. The company said that this is a court matter and that it cannot comment on the merits of the government's charges -- except, perhaps, to imply that they have no merits: "Grace categorically denies any criminal wrongdoing" and ".we look forward to setting the record straight in a court of law."

Asbestos lawsuits pushed Grace and 61 of its U.S. subsidiaries and affiliates to file a voluntary petition to reorganize under Chapter 11 of the U.S. Bankruptcy Code on April 2, 2001. Although the company proposed a plan last November to exit bankruptcy, it has still not received approval, and the indictment will certainly cast a pall over those discussions.

Investors who own companies with asbestos exposure have been watching a bill in Congress to create a $140 billion fund to replace asbestos lawsuits. The hope is that court wrangling would be replaced with an easier way to pay claims -- and finally put a hard number to what is owed. Don't hold your breath -- especially considering what's in this air. It may be a long time before such a bill is passed and signed into law. It may never happen.

There are many companies with asbestos exposure -- from specialty chemical maker RPM (NYSE:RPM) to packaging giant Owens-Illinois (NYSE:OI). Some, such as Owens Corning and Federal-Mogul, also found themselves in bankruptcy court. All have had their earnings penalized over the years as they periodically increased the reserves required for settlements.

Grace and its Libby mine have been a lightning rod for the tragedy that asbestos is. Those problems, and others, continue to hurt Grace's reported earnings. Grace's stock is down almost 8%, after being down 16% this morning. But investors had driven the stock up 250% over the last 52 weeks in anticipation that the company could exit bankruptcy and contain its asbestos claims.

Wise investors should be asking themselves this: "Why am I looking at this stock?" With so many companies to choose from, why get involved with one the DOJ has singled out for prosecution? How do you forecast the company's future with asbestos liability still unsettled? The uncertainty is real -- and it is this kind of uncertainty that can turn your hard-earned dollars into a tragic loss.

Fool contributor W.D. Crotty owns stock in RPM and reads Motley Fool newsletters to find healthy companies with great opportunities ahead. Click here to see The Motley Fool's disclosure policy.