EPA v. Maxus Energy Corporation et al.

Case summary

On May 22, 2017, the Bankruptcy Court for the District of Delaware issued an order confirming the Chapter 11 Amended Plan of Liquidation in the bankruptcy proceeding. The Amended Plan establishes, among other things, a Liquidating Trust which will litigate and/or settle certain causes of action (grounded in alter ego and fraudulent transfer theories of liability) against the parent company of the Debtors, YPF, an Argentinian state-owned corporation. Pursuant to the Amended Plan, the United States, on behalf of EPA, NOAA and DOI, is the holder of a Class 4 claim for the Diamond Alkali Site. Payment of the claim, which will be made from proceeds obtained by the Liquidating Trust though its litigation/settlement against YPF, will be equally split between EPA and the NRD Trustees. EPA will deposit its share into the Diamond Alkali Special Account for use at the Site. In addition, the United States is the holder of a Class 5 claim and will receive the proceeds that are deposited in an Environmental Remediation and Restoration Trust (ERRT), also to be equally split between EPA and the NRD Trustees. Payments to EPA from the ERRT will be deposited into the Diamond Alkali Special Account for use at the Site. The ERRT will be funded from proceeds of the litigation/settlement against YPF and, after payment to EPA and the NRD Trustees, will fund environmental remediation and restoration activities (allocated 90% to remediation and 10% to restoration) for the Diamond Alkali Site, and reimburse certain potentially responsible parties who have expended remediation and restoration funds at Operable Units 2 and 4 of the Diamond Alkali Site. Finally, the Amended Plan also contains a Property Trust which will hold title to certain properties, provide security and access necessary for environmental response activities, and pay property taxes. On December 15, 2016, the Department of Justice filed proofs of claim in this bankruptcy proceeding against two of the five debtors, and alleged they are jointly and severally liable under Section 107(a)(1) and (a)(2) of CERCLA for unreimbursed past and future response costs incurred by EPA at the Diamond Alkali Superfund Site in New Jersey. The Site consists of four operable units. In March 2016, EPA selected a remedy for the lower eight miles of the Lower Passaic River Study Area, the cost of which is estimated at $1.38 billion.

Defendants (5)

• Maxus International Energy CompanyNamed in settlement
• Maxus Exploration CompanyNamed in settlement
• Gateway Coal CompanyNamed in settlement
• Tierra Solutions, Inc.Named in complaintNamed in settlement
• Maxus Energy CorporationNamed in complaintNamed in settlement

Facilities (1)

• DIAMOND ALKALI CO.

  80 LISTER AVE, NEWARK, NJ, 07105

  Registry ID: 110009324409

Statutes cited

• CERCLA 107A — Cost Recovery

Enforcement conclusions (1)

• Maxus Energy Corporation et al.entered 2017-05-22

  Primary law: CERCLA

Timeline (6 milestones)

• 2016-09-30Referred To Dept Of Justice
• 2016-10-01Enforcement Action Data Entered
• 2016-12-15Complaint Filed With Court
• 2017-05-21Final Order Lodged
• 2017-05-22Final Order Entered
• 2017-05-22Concluded