Lyondell, the bankrupt chemical company that is liable for cleanup costs associated with removing PCBs from the Kalamazoo River, should not be allowed to use bankruptcy reorganization to shirk responsibility for paying for cleanup Michigan lawmakers told the U.S. Dept. of Justice today.
In a letter to DOJ Assistant Attorney General Moreno, Sen. Carl Levin (D-MI), Sen. Debbie Stabenow (D-MI) and Rep. Fred Upton (R-St. Joseph) said that they are worried that a proposed $162 million dollar settlement between DOJ and Lyondell falls short of what is needed to remove PCBs from the Kalamazoo Superfund site.
… the settlement allocates only $103 million for LyondellBasell’s share of the cleanup of the Kalamazoo River Superfund site; a sum the company estimated in court documents to be as high as $2.5 billion. While we understand that bankruptcy proceedings often leave creditors with a fraction of what they are owed by the debtor, we find it unacceptable that a company that will emerge from bankruptcy as a profitable entity can only pay pennies on the dollar of its obligation to clean up the Kalamazoo site. In addition to the statutory creditors standard to a bankruptcy proceeding, an environmental cleanup project also encompasses thousands of individuals and families that, although not direct parties to this proceeding, are truly creditors in every sense of the word as their health and quality of life depends on this cleanup.
The lawmakers noted that the Kalamazoo River Superfund site is one of the largest Superfund sites in the country and that it is reported to be a major contributor of PCBs to Lake Michigan. They asked DOJ to justify its proposed deal with Lyondell and to extend the comment period on the proposed settlement.
According to Bloomberg News, when a company that has caused environmental damage enters bankruptcy, the U.S. Environmental Protection Agency generally collects only about 23 percent of what the company owes for environmental cleanup.