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Enforcement

Case Summary: Chemtura Corporation Bankruptcy Settlements

Pursuant to two separate settlement agreements approved by the U.S. Bankruptcy Court for the Southern District of New York in 2010, Chemtura Corporation (Chemtura) agreed to resolve its liabilities at 18 sites across the U.S. for approximately $30 million in total.

The agreements settle the U.S.'s proofs of claim in Chemtura's bankruptcy case relating to liabilities under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, commonly known as Superfund), and for alleged violations of CERCLA, the Clean Air Act (CAA), the Clean Water Act (CWA), and the Emergency Planning and Community Right-to-Know Act (EPCRA).

The bankruptcy settlements will fund past and future cleanup costs at Superfund sites across the country, and secure Chemtura's continued agreement to comply with its cleanup obligations at a Superfund site in Connecticut and at sites that Chemtura will continue to own or operate upon its emergence from bankruptcy.

The first settlement agreement (Multi-Site Settlement) was approved by the Bankruptcy Court on September 17, 2010 and addresses liabilities at 17 sites for approximately $26 million.

The second settlement agreement (Gowanus Site Settlement) was approved by the Bankruptcy Court on December 7, 2010 and addresses one site in New York for $3.9 million.

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Overview of the company

Chemtura is a global, diversified producer of specialty chemicals, polymer products, and crop protection chemicals, and is a leading U.S. supplier of pool and spa chemicals. The majority of Chemtura's chemical products are sold to industrial manufacturing customers for use as additives, ingredients, or intermediates to add value to their end products.

Chemtura is based in Middlebury, Connecticut, operates in over 40 countries across six continents, including 13 states, and has approximately 4,000 employees. The company structure today is the result of multiple mergers and acquisitions, especially over the last two decades. Chemtura's predecessors include Crompton & Knowles Corporation, Uniroyal Chemical Corporation, Witco Corporation, and Great Lakes Chemical Corporation.

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Background information on the bankruptcy proceedings

Chemtura and its affiliated debtors commenced bankruptcy proceedings on March 18, 2009 by filing voluntary petitions for relief under Chapter 11 of the U.S. Code in the U.S. Bankruptcy Court for the Southern District of New York. On October 29, 2009, the U.S. Department of Justice (DOJ) filed proofs of claim on behalf of the U.S. Environmental Protection Agency (EPA) and the National Oceanic and Atmospheric Administration (NOAA). The U.S.'s proofs of claim under CERCLA pertained to past costs incurred and estimated future response costs at EPA-lead sites. The U.S.'s proofs of claim included a claim for penalties under CERCLA, CAA, CWA and EPCRA due to alleged violations that stemmed from a fire at Chemtura's Bio-Lab, Inc. facility in Conyers, GA.

On November 3, 2010, the Bankruptcy Court entered an order confirming Chemtura's plan of reorganization. On November 10, 2010, the effective date of Chemtura's plan of reorganization occurred.

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Overview of the settlement agreements

Multi-site settlement
Gowanus settlement
Sites affected by the settlement agreement

Multi-site settlement

On August 24, 2010, the U.S. lodged a settlement agreement between the U.S., the State of Connecticut, and Chemtura with the Bankruptcy Court to resolve Chemtura's environmental liabilities at multiple sites (Multi-Site Settlement). The Multi-Site Settlement was subject to a 15-day public comment period, and the Bankruptcy Court approved the settlement on September 17, 2010. The Multi-Site Settlement provides for Chemtura's payment of approximately $26 million in cash and allowed claims for the cleanup of 17 properties, 12 of which are Superfund sites. In accordance with the Multi-Site Settlement, Chemtura continues to be responsible for its obligations under a consent decree for the Laurel Park, Inc. Superfund Site in Naugatuck, CT, including Chemtura's obligations to perform work and reimburse costs, and Chemtura remains liable with respect to all property it currently owns or operates.

Gowanus site settlement

The Multi-Site Settlement did not address Chemtura's environmental liabilities relating to the Gowanus Canal Superfund Site, which remained the subject of ongoing negotiation at the time of the lodging of the Multi-Site Settlement with the Bankruptcy Court. On September 30, 2010, the U.S. lodged a settlement agreement between the U.S. and Chemtura to resolve such liabilities (Gowanus Site Settlement). The Gowanus Site Settlement was subject to a 30-day public comment period, and the Bankruptcy Court approved the settlement on December 7, 2010. Pursuant to the Gowanus Site Settlement, the U.S. will receive an allowed general unsecured claim of $3.9 million, which is expected to be fully paid in cash. The Gowanus Site Settlement is conditioned upon a separate settlement agreement between Chemtura and the State of New York Department of Environmental Conservation (NYSDEC) requiring Chemtura to comply with two NYSDEC orders on consent to remediate two facilities that are continuing sources of contamination to the Gowanus Canal in Brooklyn, NY.

Sites affected by the settlement agreements

As described above, under the Multi-Site Settlement, Chemtura continues to be responsible for its obligations relating to the Laurel Park, Inc. Superfund Site and Chemtura-owned/operated sites. The approximate $30 million recovery pursuant to the Multi-Site Settlement and the Gowanus Site Settlement will be divided among these sites:

  1. Beacon Heights Landfill Superfund Site, Beacon Falls, Conn.
  2. Bio-Lab Inc. facility, Conyers, Ga.
  3. Central Chemical Superfund Site, Hagerstown, Md.
  4. Cleve Reber Superfund Site, Sorrento, La.
  5. Cooper Drum Co. Superfund Site, South Gate, Calif.
  6. Delaware Sand & Gravel Landfill Superfund Site, New Castle, Del.
  7. Diamond Alkali Superfund Site, Lower Passaic River Area, N.J.
  8. Gowanus Canal Superfund Site, Brooklyn, N.Y.
  9. Great Lakes Chemical Corp. Site, El Dorado, Ark.
  10. Halby Chemical Superfund Site, Wilmington, Del.
  11. Interstate Lead Co. Superfund Site, Leeds, Ala.
  12. Jadco Hughes Facility Superfund Site, Belmont, N.C.
  13. Landia Superfund Site, Lakeland, Fla
  14. LWD Facility Superfund Site, Calvert City, Ky.
  15. Malone Service Co. Superfund Site, Texas City, Tex.
  16. Red Panther Pesticide Superfund Site, Clarksdale, Miss.
  17. Stoney Creek Technologies Superfund Site, Delaware County, Pa.
  18. Stauffer-LeMoyne Superfund Site, LeMoyne, Ala.

More site specific information is available on the Chemtura EPA funded sites and communities web page.

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Civil penalty in the Multi-Site Settlement

The Multi-Site Settlement provides for the payment of approximately $785,000 (included in the $26 million figure above) as an allowed general unsecured claim to resolve EPA's claim against Chemtura for civil penalties under CERCLA, CAA, CWA, and EPCRA due to alleged violations stemming from a May 2004 fire at Chemtura's Bio-Lab, Inc. facility in Conyers, Georgia. The penalty funds will be deposited in the U.S. Treasury.

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Contact

For more information, contact:

Craig Kaufman
Attorney Advisor
U.S. Environmental Protection Agency (MC2272A)
1200 Pennsylvania Avenue, NW
Washington, D.C. 20460
(202) 564-4284
kaufman.craig@epa.gov

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