EPA v. MAC GILLIS AND GIBBS CO.

Case summary

THE DEBTOR IS THE MACGILLIS & GIBBS CO., WHO IS THE ONLY POTENTIALLY RESPONSIBLE PARTY FOR THIS SITE. IT OWNS AND OPERATES A WOOD TREATING FACILITY AT THIS SITE IN NEW BRIGH- TON, MN. THE SITE IS LISTED ON THE NATL PRIORITIES LIST (NPL) AS THE MACGILLIS & GIBBS CO./BELL LUMBER & POLE CO. THE BANKRUPTCY ACTION IS UNDER CHAPTER 11 OF THE U.S. BANK- RUPTCY CODE. SINCE THE BANKRUPTCY ACTION WAS COMMENCED IN 1982, THE DEB TOR HAS BEEN ABLE TO SUCCESSFULLY REPAY NEARLY ALL OF ITS OUTSTANDING DEBTS TO PRIVATE CREDITORS. PRIMARY CREDITORS REMAINING UNPAID ARE THE DEBTOR'S ATTORNEYS (APPROX. $350, 000), THE STATE OF MN. (APPROX. $250,000 IN PAST STATE ENVIR ONMENTAL COSTS, PLUS TEN PER CENT OF FUTURE CLEANUP) AND THE U.S. (PAST ENVIRONMENTAL - PRIMARILY ADMINISTRATIVE - COSTS OF $103,484.34 PLUS FUTURE CLEAN-UP COSTS ESTIMATED TO BE BETWEEN SIX AND ELEVEN MILLION DOLLARS. ALTHOUGH THE NPL LISTS THE SITE BY THE TWO NAMED COMPANIES BELL LUMBER & POLE IS IN THE PROCESS OF COMPLETING CLEAN-UP OF THE PORTION OF THE SITE THAT IT OWNS. USEPA, PURSUANT TO A COOPERATIVE AGREEMENT WITH THE STATE OF MN., HAS RECENTLY APPROPRIATED $519,000 TO THE STATE TO CONDUCT A RI/FS AT DEBTOR'S SITE. IT IS PRESENTLY KNOWN THAT GROUNDWATER AND SOIL AT THE SITE ARE CONTAMINATED BY PENTACHLOROPHENOLS. IN ADDITION, A CERCLA 106 UNILATERAL REMOVAL ORDER WAS ISSUED TO DEBTOR IN 1987. DEBTOR IS CURRENTLY IN COMPLIANCE WITH THE ORDER WHICH REQUIRES, INTER ALIA, EXTRACTING A LAYER OF OIL WHICH IS ON TOP OF THE GROUNDWATER AT THE SITE. PRELIMINARY DISCUSSIONS HAVE BEEN HAD WITH THE STATE AND THE DEBTOR REGARDING THE FUTURE CLEANUP COSTS. THE STATE AND THE DEBTOR ARE KEENLY INTERESTED IN AVOIDING LIQUIDATION OF THE COMPANY. THE COMPANY PROVIDES EMPLOYMENT TO APPROXI- MATELY FORTY EMPLOYEES. THEY WOULD LIKE TO REACH AGREEMENT ON A PLAN OF REORGANIZATION WHICH WOULD ALLOW THE COMPANY TO CONTINUE IN EXISTENCE. THIS WOULD INVOLVE HAVING THE U.S. AGREE TO RELEASE DEBTOR FROM A SIGNIFICANT PORTION OF FUTURE CLEANUP COSTS, AS THE DEBTOR IS CURRENTLY ONLY PROJECTING AN ANNUAL PROFIT OF $100,000. VARIOUS OPTIONS HAVE BENN PRELI- MINARILY DISCUSSED WHICH WOULD APPEAR TO RETURN A SIGNIFI- CANTLY GREATER AMOUNT OF REIMBURSEMENT TO THE U.S. THAN WOULD LIQUIDATION OF THE DEBTOR. THE BANKRUPTCY COURT, WHICH IN APRIL, 1988, MOVED, SUA SPONTE, TO CONVERT THE CASE TO A LIQUIDATION CASE UNDER CHAPTER 7 OF THE BANKRUPTCY CODE HAS INDICATED A WILLINGNESS TO ALLOW SUFFICIENT TIME TO AL- LOW THE PARTIES TO EXPLORE SETTLEMENT POSSIBILITIES.

Defendants (2)

• BELL LUMBER AND POLE, INC.
• MCGILLIS AND GIBBS CO.Named in complaint

Facilities (1)

• MACGILLIS & GIBBS COMPANY

  440 5TH AVE. N.W., NEW BRIGHTON, MN, 55112

  Registry ID: 110001135780

Statutes cited

• CERCLA 107A — Cost Recovery

Enforcement conclusions (1)

• **PROPOSED SETTLEMENT**

  Primary law: CERCLA

Timeline (7 milestones)

• 1989-02-16Referred To Dept Of Justice
• 1989-02-17Complaint Filed With Court
• 1989-04-05Enforcement Action Data Entered
• 1989-10-04Final Order Lodged
• 1989-10-04Final Order Entered
• 1989-10-04Concluded
• 1989-10-04Enforcement Action Closed