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Case Summary: 2011 Settlement Agreements in the MLC (General Motors) Bankruptcy Settlement

On March 3, 2011, the Bankruptcy Court approved an additional six settlements between the United States and Motors Liquidation Company (MLC, also known as "Old GM", and formerly known as General Motors Corporation), to settle certain environmental liabilities at six sites under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, commonly known as Superfund) and the Resource Conservation and Recovery Act (RCRA). The settlement agreements were filed with the United Stated Bankruptcy Court for the Southern District of New York on December 14, 2010.

On March 4, 2011, the government filed a seventh settlement agreement with same court to resolve environmental claims at 34 non-owned sites under CERCLA, RCRA, and the Clean Air Act (CAA). The agreement was approved by the court on March 7, 2012.

Under the terms of the settlements, EPA will receive cash, as well as allowed general unsecured claims and work performance collectively exceeding $51 million to settle environmental claims at various sites contaminated with hazardous waste and resolve civil penalties at other facilities.

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Summary of March 3, 2011 Approved Settlement Agreements

The six settlement agreements approved on March 3, 2011 resolve MLC's environmental liabilities at six sites where MLC was subject to an administrative or court order requiring it to perform cleanup. The settlement agreements were with the United States and the states of Indiana, Iowa, Ohio, Wisconsin and Delaware. The settlements provide over $25 million for cleanup work at the sites.

The six settlements and the funding for cleanup work are as follows:

Site Name City, State Amount
Scatterfield Road, “Delphi E&E Management Site” Anderson, Ind. $3,599,039
Former AC Rochester Plant Sioux City, Iowa $6,476,634
Delphi  Harrison Facility Montgomery County, Ohio $5,329,343
Garland Road Landfill Miami County, Ohio $6,732,895
(as well as an EPA General Unsecured Claim of $2,574,760 and a state General
Unsecured Claim of $134,326)
Wheeler Pit Superfund Site Rock County, Wis. $385,991
(as well as an EPA General Unsecured Claim of $95,045)
Harvey & Knott Drum Superfund Site New Castle County, Del. $2,484,816
(as well as an EPA General Unsecured Claim of $377,063)

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Summary of March 7, 2011 Approved Settlement Agreement

The seventh settlement agreement, approved by the bankruptcy court on March 7, 2011, had been filed by the United States and the states of California, Michigan, Ohio, Illinois, Kansas, New Jersey, New York, Delaware, Maryland and Pennsylvania on March 3, 2012.  The settlement agreement was filed against MLC for environmental liabilities at 34 non-owned sites and for civil penalties under RCRA and CAA at other facilities.

Under the agreement, EPA will receive the following:

  • allowed general unsecured claims collectively exceeding $36 million,
  • allowed general unsecured claims of $353,000 for multi-regional RCRA violation claims,
  • $48,260 for Region 5 RCRA financial assurance penalty claims, and
  • $875,000 for a CAA violation claim.

All of these claims will be paid in stocks and warrants of the General Motors Corporation (also known as the “New GM”) in an amount to be determined through the ongoing bankruptcy proceeding. The U.S. anticipates that, as a function of bankruptcy law, the stocks and warrants received by EPA will have a cash value of less than the face amount of EPA’s allowed general unsecured claim.  In addition, the settlement provides for allowed general unsecured claims of approximately $2 million to potentially responsible party (PRP) groups at specific sites.

EPA will also receive cash in the amount of $4.6 million from performance bonds posted by MLC to cover cleanup work, and sureties of certain bonds will perform cleanup work valued at $10.5 million.

The allowed general unsecured claims will potentially impact the cleanup at 29 of the 34 non-owned sites, as follows:

Site Name State Amount
Operating Industries Site Calif. $2,300,000
Casmalia Site Calif. $344,039
Chevy In The Hole Site Mich. $4,200,000
Dearborn Refining Site Mich. $130,000
Rose Dump Site Mich. $211,108
Forest Waste Site Mich. $495,460
Reclamation Oil Site Mich. $253,642
Springfield Township Dump Site Mich. $211,108
Tremont Barrel Site Ohio $7,500,000
Valley Crest Site Ohio $7,000,000
South Dayton Dump Site Ohio $4,000,000
Lammers Barrel Site Ohio $1,200,000
Chemical Recovery Site Ohio $40,000
Lake Calumet Site Ill. $14,600
Doepke Disposal Site Kan. $155,000
Ventron/Velsicol Site N.J. $200,000
Atlantic Resources Site N.J. $172,200
Massena Site (footnote) N.Y. $2,741,731
Tri-Cities Site N.Y. $40,000
Mercury Refining Site N.Y. $18,192
Sealand Site N.Y. $791,000
Delaware Sand & Gravel Site Del. $1,234,250
Army Creek Site Del. $300,000
Breslube-Penn Site Pa. $1,100,000
Malvern TCE Site Pa. $381,000
Tonolli Corporation Site Pa. $50,400
Jacks Creek Site Pa. $1,155
68th Street Dump Site Md. $2,368,000 + $112,000 bond
Spectron Site Md. $581,664

Footnote: Past Costs for Massena were settled for an allowed general unsecured claim of $2,741,731. Post Petition Costs for Massena were settled for $871,653 and will be paid from the Environmental Response Trust. Therefore, the Post Petition Costs will not be included within the terms of this Settlement Agreement.

The performance bonds will impact cleanup at 5 of the 34 non-owned sites, as follows:

Site Name State Amount
Maryland Sand & Gravel Md. $1,400,000
68th Street Dump Site Md. $122,000 bond (+$2,368,000 Allowed GUC)
H. Brown Site Mich. $89,000
Sanitary Landfill Site Ohio $2,423,000
Ford Road Site Ohio $589,322
Waukegan Site (as part of Outboard Marine Site) (remedial work to be performed) Ill. $10,500,000

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