Enforcement

Case Summary: 2012 Settlement Agreements in the MLC (General Motors) Bankruptcy

On March, 29, 2012, the United States Bankruptcy Court for the Southern District of New York (SDNY) approved an agreement between the United States and Motor Liquidation Company (MLC, also known as "Old GM", and formerly known as General Motors Corporation), to resolve environmental claims at the Diamond Alkali Superfund Site, the Kane & Lombard Street Drum Superfund Site, and the Hayford Bridge Road Groundwater Superfund Site.

On June 29, 2012, the United States Bankruptcy Court for the Southern District of New York approved a settlement to resolve environmental claims at the Onondaga Lake Superfund Site and entered the tax offset stipulation associated with the bankruptcy settlement.

Under the terms of the two 2012 settlements, EPA will receive cash, allowed general unsecured claims, and work performance collectively exceeding $61 million to settle environmental claims at various sites.

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Summary of March 29, 2012 Settlement Agreement

The March 29, 2012 settlement agreement resolves MLC's environmental liabilities at three sites and provides over $20.9 million in allowed general unsecured claims for the sites, as well as up to $2,896,334 through performance bonds for cleanup work at the sites.

  • The Diamond Alkali Superfund Site is located in and around Essex, Hudson and Passaic Counties in New Jersey and includes a 17-mile portion of the Passaic River, Newark Bay, and portions of the Hackensack River. The settlement allocates an allowed general unsecured claim of $19.5 million to the cleanup costs at the Diamond Alkali Superfund Site.
  • The Kane & Lombard Street Drums Superfund Site, located in Baltimore County in Maryland, is a former open dump.  The settlement allocates up to $2,448,334 in funds for cleanup work at the site.
  • The Hayford Bridge Road Groundwater Superfund Site, located in St. Charles, Missouri, is a former chemical reprocessing facility. The settlement allocates work up to $448,000 in accordance with the terms of a bond posted by Old GM and an allowed general unsecured claim in the amount of $1,402,000 to the cleanup at the Hayford Bridge Site.

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Summary of the June 29, 2012 Settlement Agreement

The June 29, 2012 settlement agreement resolves MLC's environmental liabilities at the Onondaga Lake Superfund site, located in Onondaga County, N.Y. The United States previously settled Old GM’s environmental liabilities to EPA in connection with portions of the Onondaga Lake Superfund Site, including the IFG Facility and the adjacent PCB Dredging Site, which were owned by Old GM, and the upper reaches of Ley Creek, which were subject to an existing cleanup order. This prior settlement agreement led to the creation of the environmental response trust to remediate and redevelop contaminated properties formerly owned by Old GM, and allocated cash funding for environmental cleanup and oversight costs in the amount of $22.5 million to the IFG facility, $1.8 million to the PCB Dredgings Site, and $8.5 million to the upper reaches of Ley Creek. This settlement resolved Old GM’s remaining environmental liabilities to EPA at the Onondaga Lake Superfund Site.

The Onondaga Lake Superfund Site encompasses 185,000 acres and is located in Onondaga County, New York. It consists of the Onondaga Lake, seven major and several minor tributaries, and contamination sources upland of the Lake. In 1952, Old GM bought the Inland Fisher Guide Facility (“IFG Facility”), which is located on the Onondaga Lake Superfund Site.  Under the 2012 settlement agreement, EPA received the following allowed general unsecured claims:

  • $38.3 million for environmental cleanup at the lower reaches of Ley Creek;
  • $438,448 for unreimbursed past and future oversight costs at Onondaga Lake;
  • $113,248 for unreimbursed past and future oversight costs at the Salina Landfill;
  • $234,475 for unreimbursed past costs at the IFG Facility; and
  • $110,395 for unreimbursed past costs at the PCB Dredgings Site.

The $39.2 million settlement, to be paid in New GM stock and warrants at less than the full value of the claim, was reduced by $17.3 million as a result of the court's entry of the tax offset stipulation. That meant that $17.3 million was paid to EPA in full (at 100 cents on the dollar), leaving only the remaining $21.9 million settlement amount to be paid in New GM stock and warrants.

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Contact

For more information contact:

Bob Roberts
Attorney-Advisor
U.S. Environmental Protection Agency 
1200 Pennsylvania Avenue, NW
MC-2272A
Washington, D.C. 20460
202 564 4267
roberts.robert@epa.gov

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