Preet Bharara, the United States Attorney for the Southern District of New York, and Judith A. Enck, Regional Administrator for the U.S. Environmental Protection Agency (“EPA”), announced today that the United States has entered into a settlement agreement with a bankruptcy trust on behalf of GETTY PETROLEUM MARKETING INC. (“GPMI”) and GETTY TERMINALS CORP. (“GETTY TERMINALS”) (collectively, “GETTY”), which filed for bankruptcy on December 5, 2011.
The settlement resolves Getty’s liabilities at Newtown Creek, a Superfund Site in Brooklyn and Queens, New York, and one of the nation’s most polluted waterways. Pursuant to the settlement agreement, which addresses Getty’s liability under the Comprehensive Environmental Response, Compensation and Liability Act (also known as the Superfund law) and the federal Oil Pollution Act, Getty agrees that the United States will receive an allowed $16 million claim in the bankruptcy process.
U.S. Attorney Preet Bharara said: “For more than a century, irresponsible industrial activities turned Newtown Creek into a tributary of toxic waste. Today’s settlement ensures that Getty takes responsibility for its contribution to that sad legacy, and pays a fair share of clean-up costs at the site. This Office is committed to holding those who contaminate our nation’s lands and waterways accountable for their actions, and bankruptcy is not a free pass for polluters.”
EPA Regional Administrator Judith Enck said: “The Superfund program operates on the principle that polluters should pay for the cleanups, rather than passing the costs to taxpayers. Getty’s decades of irresponsibility and indifference to the environment could pose significant environmental risks to Newtown Creek communities and must be addressed. EPA added Newtown Creek to its Superfund National Priorities List of the country’s most hazardous waste sites in September 2010 because its water and sediment contain a range of contaminants including pesticides, heavy metals, polychlorinated biphenyls (PCBs) and volatile organic compounds. EPA is dedicated to cleaning up this area and will hold all responsible parties accountable.”
In its proof of claim, the United States asserted claims against Getty on behalf of the EPA for clean-up costs at the Newtown Creek Superfund Site and on behalf of the U.S. Department of the Interior (“DOI”) and the National Oceanic and Atmospheric Administration (“NOAA”) of the U.S. Department of Commerce for injuries to natural resources at the site. The proof of claim alleged, among other things, that Getty Terminals operated a facility adjacent to Newtown Creek that stored, blended, and distributed gasoline, fuel oil, and gasoline blending additives, and that Getty Terminals utilized underground and aboveground tanks at the facility for the storage of gasoline, diesel, and fuel oil. As alleged in the proof of claim, during the course of operations of the facility, Getty Terminals discharged contaminants from the facility to Newtown Creek, including effluent with lead concentrations and other hazardous substances.
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In the settlement agreement filed in bankruptcy court today, the bankruptcy trustee acknowledges Getty’s admission that GPMI was formed to run the marketing and sales business of the former Getty Petroleum Corporation, including the Newtown Creek facility, and that GPMI leased the facility. The bankruptcy trustee also acknowledges Getty’s admission that Getty Terminals operated the facility and exercised actual control or held significant authority to control activities at the facility. Further, the trustee acknowledges in the settlement agreement that Getty has admitted that a spill occurred at the facility in October 2005.
Under the settlement agreement, the United States will receive an allowed general unsecured claim in the amount of $14,844,800 for EPA in settlement of the United States’ claim for the costs of clean-up at the Newtown Creek Superfund Site, and an additional allowed general unsecured claim in the amount of $1,155,200 for claims by DOI and NOAA relating to natural resource damages and costs of assessment at the Newtown Creek Superfund Site. The allowed claims will be paid in an amount to be determined through the bankruptcy process.
The settlement agreement will be lodged with the Bankruptcy Court for a period of at least 30 days before it is submitted for the Court’s approval, to provide public notice and to afford members of the public the opportunity to comment on the consent decree.
Mr. Bharara praised the efforts of EPA, DOI, and NOAA in this case.
This case is being handled by the Office’s Environmental Protection Unit and Tax and Bankruptcy Unit. Assistant United States Attorney Joseph N. Cordaro is in charge of the case.