The federal government has entered into settlement agreements with Eastman Kodak Company that resolve environmental claims and liabilities asserted by the United States against Kodak. After Kodak filed for Chapter 11 bankruptcy protection on January 19, 2012, the United States filed a proof of claim asserting Kodak’s responsibility for significant environmental claims and clean-up obligations. The first settlement resolves environmental liabilities at the Eastman Business Park in Rochester, New York, which is a hazardous waste site regulated under the Resource Conservation and Recovery Act (“RCRA”). The second settlement resolves liabilities under the Comprehensive Environmental Response, Compensation and Liability Act (also known as the Superfund law) at the Mercury Refining Superfund site in Colonie and Guilderland, New York, and the Fair Lawn Well Field Superfund site in Fair Lawn, New Jersey.
Preet Bharara, the United States Attorney for the Southern District of New York, pointed out that the settlements will lead to the clean-up of more than a century of pollution by Kodak at the Eastman Business Park and Rochester’s Genesee River, while clearing the way for economic development at the Eastman Business Park. Kodak will also pay for contamination it caused at Superfund sites in New York and New Jersey. "These resolutions demonstrate the commitment of the United States to prevent even bankrupt companies from escaping responsibility for environmental contamination"' he stated.
Judith A. Enck, Regional Administrator of the U.S. Environmental Protection Agency, said: “The proposed legal agreements will provide funding to clean up the toxic legacy that Kodak has left in Rochester. They are designed to protect public health and the environment, including cleaning up the Genesee River, while supporting the creation of scores of much needed new jobs in Rochester. I encourage the public to comment on the agreement.”
Three agreements were filed in bankruptcy court earlier this month. Two of them – a settlement agreement between the United States and Kodak and a related funding agreement between the United States and the New York State Department of Environmental Conservation (“DEC”) – relate to environmental clean-up at the Eastman Business Park and the Genesee River. Pursuant to these agreements, Kodak commits to fund a trust with $49 million for clean-up at the Eastman Business Park site and the Genesee River; DEC agrees to fund any additional costs of clean-up between $49 million and $99 million; and Kodak and DEC each agree to pay half of any costs above $99 million. As described in the settlement agreement, EPA and DEC have also entered a publicly available agreement that sets forth a plan for the investigation of contamination in the Genesee River and the selection and implementation of a clean-up remedy. These arrangements build upon and strengthen an agreement that Kodak and DEC originally proposed to the bankruptcy court in June 2013. The Eastman Business Park settlement agreement also provides that Kodak will pay the United States more than $4 million, and an additional amount pursuant to the terms of Kodak’s plan of reorganization, to satisfy environmental liabilities for damages to natural resources in the Genesee River.
Since 1891, the Eastman Business Park has been Kodak’s primary photographic product manufacturing facility. In the course of Kodak’s operations, releases of hazardous waste occurred at the business park and into the nearby Genesee River. Kodak is responsible under federal environmental law for the management of this hazardous waste and clean-up of historic contamination at the site, and it is also responsible for damages for injury to natural resources in the Genesee River. The agreements relating to the Eastman Business Park ensure that Kodak’s legacy of contamination will be addressed. In addition, these agreements will promote economic development at the Eastman Business Park by providing opportunities for new businesses to move to the park without bearing the burden of Kodak’s historic contamination.
The third agreement that the United States has filed is a settlement agreement between the United States and Kodak relating to Kodak’s environmental liabilities at the Fair Lawn Well Field Superfund Site and the Mercury Refining Superfund Site. Under this agreement, Kodak will provide the United States with $2,000,000 for the Fair Lawn site and approximately $750,000 for the Mercury Refining site, plus additional amounts for each site pursuant to the terms of Kodak’s plan of reorganization.
The settlement agreements will be filed with the Bankruptcy Court for a period of at least 30 days before their entry to provide public notice and to afford members of the public the opportunity to comment on the settlement agreements. Written comments must be submitted within 30 days of the publication of notice of the settlement agreements in the Federal Register and be emailed to email@example.com or mailed to Assistant Attorney General, U.S. DOJ – ENRD, P.O. Box 7611, Washington, D.C. 20044-7611.
Mr. Bharara praised the efforts of EPA and the Environment and Natural Resources Division of the U.S. Department of Justice in this case.
Assistant United States Attorneys Robert William Yalen and Christine S. Poscablo are in charge of the case, which has been handled by the Office’s Environmental Protection Unit and Tax and Bankruptcy Unit.
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