The largest Superfund cleanup settlement ever made with a company in bankruptcy court was announced Tuesday - and it should fund much of the cleanup of the contaminated Sharon Steel tailings in Midvale.
The settlement is between Sharon Steel, the Environmental Protection Agency and the state of Utah. It is embodied in a consent decree filed in U.S. District Court in Salt Lake City late Monday.The toxic tailings from the Sharon Steel mill make up one of Utah's most dangerous waste sites, as blowing dust from the plant have contaminated yards, vacant lots and businesses in Midvale. This settlement may hasten the cleanup.
Soil samples taken late in 1989 turned up one reading of lead at 4,000 parts per million in a vacant lot, with one home's lead level reaching 2,500 ppm - far beyond the EPA's "action level" of 500 ppm, above which it will take action to clean up the contamination.
"This important settlement represents a firm commitment by the corporation to clean up a hazardous mining waste site," said James M. Strock, the EPA's assistant administrator for enforcement.
"Furthermore, the agreement assures that the corporation will contribute toward environmental protection while getting back on its feet."
Kenneth Alkema, director of the Utah Division of Environmental Health, said the agreement is an important step that will help resolve the Midvale pollution problem.
Sharon Steel Corp. agreed to pay either a lump sum of $22 million cash for the cleanup or a mixed settlement of cash and claims in bankruptcy court covering $82 million in claims.
"It's indefinite because the settlement in some parts is premised on the reorganization success of Sharon Steel" in action in U.S. Bankruptcy Court, Matthew Cohn, an EPA attorney in the Denver regional office, said in an interview Tuesday.
If Sharon Steel succeeds in reorganizing itself to the court's satisfaction by a certain date, he said, the payment will be the lump-sum $22 million. Otherwise, the company will assume debts in bankruptcy court.
The second option would have Sharon Steel pay $3 million in cash immediately, $9 million cash over the next five years, and cover $70 million in unsecured claims, according to Alkema.
The amount in the agreement in either case "was calculated so that we hoped the amounts would come out about the same," Cohn said. That is because claims often are discounted in bankruptcy court - not paid off at $1 for each $1 in claims.
In addition to the payment, the decree says that Sharon Steel will:
- Provide permanent access to its property to allow for cleanup and monitoring.
- Dismiss its claims against the federal government and the state of Utah.
Public comments will be accepted on the consent decree for 30 days before U.S. District Chief Judge Bruce S. Jenkins decides whether to approve it.
The agreement covers responsibilities only of Sharon Steel, which owns the Midvale tailings site and a portion of a slag site nearby. However, two other parties named as defendants in a federal suit have not agreed to a settlement.
Trial of the suit against UV Industries Inc. Liquidating Trust and the Atlantic Richfield Co. is set to begin on Oct. 8 before Jenkins.
In a separate administrative order worked out between Utah and the EPA, the state agreed that its insurance carrier should pay $50,000 to resolve any potential liability due to ownership of the right of way at 7800 South, where tailings have blown.
Attorney General Paul Van Dam, in a prepared statement, noted that this was a minor issue in the suit, but that the state's involvement in the lawsuit required spending significant state resources.
"Settlement will allow us to turn more resources to the most important aspect of the site," Van Dam's statement said. This is "selection of an appropriate final remedy."