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EPA, Mass. and New Bedford Settle Bankruptcy Claim with Aerovox
Release Date: 08/15/2003
Contact Information: Andrew Spejewski, EPA Press Office, 617-918-1014
BOSTON – The U.S. Environmental Protection Agency, the Commonwealth of Massachusetts, and the City of New Bedford today announced that they have reached an agreement with the bankruptcy estate of New Bedford Capacitor, Inc., formerly Aerovox, Inc., and the Committee of Unsecured Creditors in the bankruptcy proceedings. The agreement will result in an estimated $2.25 million in payments to EPA for PCB cleanup at the Aerovox facility, as well as a $250,000 payment to the City of New Bedford for security and fire protection at the now-abandoned facility.
The Aerovox facility was used for many years to manufacture electrical capacitors, which prior to 1978 used polychlorinated biphenyls (PCBs), resulting in extensive contamination of the site. In 1999, EPA and Aerovox agreed to a cleanup plan in which Aerovox would move to a new facility, and make gradual payments to a trust fund that would pay for demolishing the facility and capping the site to seal off the contamination. Aerovox made an initial deposit to the trust fund, but in June 2001 filed for bankruptcy protection and has not made any further deposits.
The settlement announced today resolves all of EPA’s and Massachusetts’ claims against Aerovox for cleanup of existing contamination at the site. EPA will receive approximately $900,000 from the cleanup trust fund; an immediate $200,000 from the bankruptcy estate; and a general unsecured claim of $8.2 million, of which only a portion is expected to be paid after confirmation of a bankruptcy plan. The funds will be placed in an EPA account to fund future cleanup at the site. EPA is currently examining cleanup options for the site.
Additionally, as part of the settlement, the City of New Bedford will receive $250,000 to cover expenses related to the continued operation of the fire suppression system and security and maintenance issues. The Aerovox estate, EPA, and the City are also working to facilitate redevelopment of the site.
“This settlement is fair to the creditors and provides funding for future cleanup work at Aerovox’s facility.” said Robert W. Varney, regional administrator for EPA’s New England Office. “Most importantly, it lays the groundwork for future redevelopment at the site. It’s a product of productive cooperation by EPA, the Commonwealth of Massachusetts and the City of New Bedford.”
“In the past, property owners have abandoned undesirable properties and left local taxpayers to pick up the tab,” said Frederick M. Kalisz, Jr., Mayor of New Bedford. “The City is fortunate to have secured this funding to reduce the local burden to keep this site secure. I look forward to working with the involved parties on future cleanup and redevelopment efforts.”
“This is a fair decision which will ensure that the cleanup at this facility moves forward,” said Robert W. Golledge Jr., commissioner of the Massachusetts Department of Environmental Protection. “This spirit of cooperation between the federal, state and local partners will foster redevelopment opportunities for the site.”