EPA v. L & S INDUSTRIES, INC.

Case summary

THE BANKRUPTCY PROCEEDING INVOLVING L&S INDUSTIRES, INC. (L&S) IS A CHAPTER 7 LIQUIDATION, NO. B87-4597, PENDING BE- BEFORE JUDGE RANDOLPH BAXTER IN THE NORTHERN DISTRICT OF OHIO. EPA FIRST BECAME AWARE OF THIS ACTION WHEN, ON SEPT. 30, 1988, THE ATTORNEY FOR THE U.S. TRUSTEE, JOEL RATHBONE, FILED TWO MOTIONS BOTH OF WHICH NAMED THE U.S. AS A DEFEN- DANT. THE FIRST OF THESE MOTIONS SOUGHT A COURT ORDER TO ALLOW THE TRUSTEE TO USE ESTATE FUNDS TO DISPOSE OF CHEMICAL WASTE ON THE L&S PROPERTY. IT WAS ESTIMATED IN THAT MOTION THAT THE COST OF PROPERLY DISPOSING OF ANY CHEMICAL WASTE WAS $1500 TO $10,000. THE TRUSTEE REPORTED THAT THE ESTATE CONTAINED $135,167, ALL OF WHICH WAS SUBJECT TO CLAIMS OF SECURED CREDITORS AND VARIOUS ADMINISTRATIVE CLAIMS. THE SECOND MOTION REQUESTED THE COURT TO ENTER AN ORDER RE- QUIRING THE UNITED STATES, THE EPA, THE STATE OF OHIO AND THE OHIO EPA TO ASSIST THE TRUSTEE IN THE PROPER DISPOSAL OF CERTAIN CHEMICAL WASTE BELONGING TO THE DEBTOR. THAT MOTION FURTHER STATED THAT THERE WERE THREE DRUMS OF CHEMICAL WASTE ON THE L&S PROPERTY WHICH THE TRUSTEE BE- LIEVED REQUIRED SPECIAL DISPOSAL IN ACCORDANCE WITH FEDERAL AND STATE REGULATIONS. - A HEARING ON THE MOTIONS WAS SCHEDULED FOR NOVEMBER 3, 1988, AT WHICH TIME A REPRESENTATIVE OF THE ENVIRONMENTAL DEFENSE SECTION AT THE DEPT. OF JUSTICE, ELIEEN MCDONNOUGH, APPEARED ON BEHALF OF THE U.S.. ALSO PRESENT WERE REPRESENTATIVES FROM EPA-REGION V, THE OEPA AND THE OHIO ATTORNEY GENERAL'S OFFICE ON BEHALF OF THE STATE OF OHIO. - WHEN THE MOTIONS CAME ON, JUDGE BAXTER DID NOT ALLOW ANY OF THE GOV'T REPRESENTATIVES TO SPEAK FOR THE REASON THAT NEITHER THE STATE OR THE FEDERAL GOV'T HAD FILED ANY WRITTEN PAPERS PRIOR TO THE HEARING. WE WERE PREPARED TO TAKE THE POSITION THAT WHILE THE GOV'T SUPPORTED THE USE OF ESTATE FUNDS FOR AN ENVIORNMENTAL CLEANUP, WE WERE OPOSED TO HAVING THE BANKRUPTCY COURT ORDER THE AGENCY TO ASSIST THE TRUSTEE. INSTEAD, THE AGENCY WOULD BE WILLING TO COOPERATE WITH THE TRUSTEE TO SEE THAT A PROPER ENVIRONMENTAL CLEANUP WAS AC- COMPLISHED. THE OUTCOME OF THE HEARING WAS THAT THE JUDGE ALLOWED ANY INTERESTED PARTY TO FILE ANY MOTIONS IT CHOSE TO BY NOVMEBER 10, 1988, WHICH WOULD BE CONSIDERED AT THE NEXT MOTION CALL. - DOJ FILED A MEMORANDUM SUPPORTING THE TRUSTEE'S MOTION TO EXPEND ESTATE FUNDS FOR ENVIRONMENTAL CLEANUP ON NOVEMBER 10, 1988. - ANOTHER HEARING WAS HELD ON DECEMBER 1, 1988, AT WHICH TIME THE TRUSTEE WITHDRAW THE MOTION REQUESTING THAT THE COURT ORDER THE AGENCY TO ASSIST IN A PROPER CLEANUP. - DISCUSSIONS WITH THE ATTORNEY FOR THE U.S. TRUSTEE HAVE IN- DICATED THAT THERE IS A GOOD LIKELIHOOD THAT THE EPA COULD NEGOTIATE A STIPULATED SETTLEMENT OF ITS INTEREST IN THIS MATTER. THIS WOULD INVOLVE AN AGREEMENT AMONG THE VARIOUS ADMINISTRATIVE CLAIMANTS IN THE MATTER TO SPLIT UP THE UN- ENCUMBERED FUNDS REMAINING IN THE DEBTOR'S ESTATE AFTER THE SECURED CREDITORS ARE PAID. AS IT NOW STANDS, THERE IS APPROXIMATELY $135,000 IN THE ESTATE, ABOUT $90,000 OF WHICH IS SUBJECT TO A SECURED CLAIM OF STEWART-WARNER CORP. ASSUM ING THAT THE STEWART-WARNER CLAIM GETS PAID IN FULL, THERE WOULD REMAIN IN THE ESTATE ABOUT $45,000 TO SATISFY ADMINI- STRATIVE CLAIMAINTS. WHILE THAT AMOUNT IS PROBABLY NOT SUF- FICIENT TO ACCOMPLISH A FULL CLEANUP OF THE SITE, IT IS AN AMOUNT WORTH PURSUING BY MEANS OF A STIPULATED SETTLEMENT. -

Defendants (1)

• L & S INDUSTRIES, INC.Named in complaintNamed in settlement

Facilities (1)

• L & S INDUSTRIES INC

  5182 RICHMOND RD, CLEVELAND, OH, 44146

  Registry ID: 110010735320

Statutes cited

• CERCLA 107A — Cost Recovery

Enforcement conclusions (1)

• L & S INDUSTRIESentered 1989-07-18

  Primary law: CERCLA

Timeline (7 milestones)

• 1988-11-15Enforcement Action Data Entered
• 1989-02-06Referred To Dept Of Justice
• 1989-07-18Final Order Entered
• 1989-07-18Complaint Filed With Court
• 1989-07-18Concluded
• 1989-07-18Enforcement Action Closed
• 1989-07-18Final Order Lodged