Freedom Industries Inc. is planning a hasty demolition of its chemical storage facility on the banks of the Elk River, the site of the January spill that tainted a large portion of West Virginia's water supply, the Wall Street Journal reported today. In court papers filed on Friday, Freedom asked Bankruptcy Judge Ronald G. Pearson for the authority to proceed with the demolition, which could be completed by the end of June. The facility, called the Etowah River Terminal, comprises large chemical storage tanks as well as two computer-controlled loading stations, according to court documents. Under an order issued by West Virginia Department of Environmental Protection earlier this year, Freedom is required to dismantle all of the facility's storage tanks, piping and related machinery.
Judges at the Seventh Circuit Court of Appeals yesterday appeared to challenge a key argument in the Archdiocese of Milwaukee's efforts to protect $60 million it holds in a trust for the care of cemeteries from being used to pay creditors in its bankruptcy, the Milwaukee Journal Sentinel reported today. The three-judge panel questioned whether the archdiocese needs that entire $60 million to maintain its cemeteries. And one of the jurists, Seventh Circuit Judge Ann Claire Williams, said she found issues related to U.S. District Judge Rudolph T. Randa's decision not to recuse himself from the lawsuit over those funds "troubling." The panel — Appellate Judges Williams and Joel Flaum, along with U.S. District Judge Robert Dow of the Northern District of Illinois — heard oral arguments Monday on several issues related to the bankruptcy, including First Amendment questions that could be of national significance as religious liberty cases make their way through courts around the country. In that lawsuit, filed by Archbishop Jerome Listecki as sole trustee of the cemetery trust, the church maintains that forcing it to turn over even $1 in cemetery funds to the bankruptcy estate would substantially burden its free exercise of religion under the First Amendment and the federal Religious Freedom Restoration Act. Proceeds from the estate would go to finance a settlement with sex abuse victims and the archdiocese's reorganization.
General Motors Co.'s effort to contain a safety scandal will come to a pivotal juncture as soon as this week, when former U.S. Attorney Anton Valukas releases his report on the matter, the Wall Street Journal reported today. Since February, when GM announced the first recall of vehicles equipped with faulty ignition switches now linked to at least 13 deaths, the company hasn't said who was responsible for most of the crucial decisions since 2001. GM hasn't fired anyone in connection with the defect and recall, which has cost the automaker $1.7 billion. Two low-level engineers involved with the design of the switch are on paid leave. Two senior executives have retired. (Subscription required.) http://online.wsj.com/articles/gm-recall-seeking-answers-from-valukas-r…
In related news, a General Motors Co. dealer in Arkansas is seeking compensation for being saddled with an inventory of “highly dangerous vehicles” that includes cars not yet recalled over ignition-switch defects, Bloomberg News reported today. Nettleton Auto Sales Inc. demanded actual and punitive damages on behalf of all of the company’s U.S. dealers in a complaint filed May 23 in federal court in Little Rock, Arkansas. GM disclosed the lawsuit yesterday in U.S. Bankruptcy Court in Manhattan. GM “actively” concealed the ignition-switch defect until this year, Nettleton alleged. Detroit-based GM has recalled 2.59 million cars to repair the switches while blaming 13 deaths on the defect, which could unintentionally cut engine power and deactivate air bags. http://www.bloomberg.com/news/print/2014-06-03/gm-dealer-demands-damage…
Nearly four years into its chapter 11 bankruptcy, Garlock Sealing Technologies Inc. has started the paperwork to get out of it, the Rochester (N.Y.) Democrat & Herald reported on Saturday. The Palmyra, N.Y.-based maker of industrial gaskets and seals on Thursday filed a proposed reorganization plan in bankruptcy court. That 347-page document spells out how the company proposes to wrap up all the myriad asbestos-related personal-injury claims that caused it to file for bankruptcy in June 2010. The company, as well as parent company EnPro Industries, are proposing a $275 million trust fund, split over two accounts, to handle any current and future claims against Garlock.
One of the General Motors Co. engineers at the center of the controversy over the company's handling of a deadly ignition switch defect has met with congressional investigators, indicating lawmakers are accelerating their probe, the Wall Street Journal reported today. Raymond DeGiorgio, who was suspended last month with pay, traveled to Capitol Hill to talk about his role in a design change to ignition switches installed in 2.6 million GM compact cars that the company recalled earlier this year. The ignition switches can slip out of the run position, causing the cars to stall, and lose power to steering and airbags. GM has linked 13 fatalities to the defect. Plaintiffs' lawyers say the death toll is higher. In 2006, about two years after cars containing the defective switches were launched, DeGiorgio signed off on a change to the ignition switches that improved their performance, according to company documents. But company documents show that the design change wasn't accompanied by a change to the part number. That action made it difficult to track the change, and it wasn’t until 2013, as a result of ongoing litigation, that GM officials realized that the part number was not changed.
Anadarko Petroleum Corp.'s agreement to pay $5.15 billion to clean up nuclear fuel and other pollution moved one step closer to reality yesterday after receiving a bankruptcy judge's approval, Reuters reported yesterday. The agreement reached in April, touted by the U.S. Department of Justice as the largest-ever environmental cleanup recovery, resolved a lawsuit against Anadarko and its Kerr-McGee unit from creditors of Tronox Inc., the paint materials maker that was once a subsidiary of Kerr-McGee. The lawsuit, which was joined by the DOJ, alleged that Tronox's 2009 bankruptcy was caused by the environmental liabilities it took on when Kerr-McGee spun it off in 2005. It said that the spinoff was a scheme by Kerr-McGee to get the liabilities off its books and make itself a more attractive takeover target for Anadarko, which acquired it in 2006.
Victims that lost money as a result of General Motors Co.'s ignition-switch problem could be forced to battle old-GM creditors for the remains of a trust that contains just more than $1 billion, according to a new court filing, if the victims are unsuccessful in gaining bankruptcy-court permission to sue the much richer, current General Motors company, Dow Jones Daily Bankruptcy Review reported today. The trust, which is all that remains financially of the prebankruptcy General Motors business, set aside as disputed creditor claims are resolved, is likely the only place these victims can turn for compensation if they can't sue General Motors. (Subscription required.) http://bankruptcynews.dowjones.com/Article?an=DJFDBR0020140527ea5rn8bqh…
In related news, General Motors Co. is facing growing pressure over its position that 13 people have died in accidents related to defective ignition switches installed in 2.6 million small cars, the Wall Street Journal reported today. "We believe it's likely that more than 13 lives were lost," said David Friedman, acting administrator of the National Highway Traffic Safety Administration. "GM knew about the safety defect, but did not act to protect Americans from that defect until this year." GM yesterday didn't directly address the dispute over the number of fatalities. On Friday, a GM spokesman said only 13 fatalities may be related to the defect. (Subscription required.) http://online.wsj.com/news/articles/SB100014240527023048119045795881022…
A bankruptcy judge’s decision that a General Motors Co. customer failed to state a valid claim against the estate of “Old GM” was upheld by a federal judge in Manhattan, Bloomberg News reported yesterday. Such rulings don’t get overturned unless the court’s findings of fact are clearly wrong, U.S. District Judge Lorna Schofield said in ending the appeal of U.S. Bankruptcy Judge Robert Gerber’s decision. An Old GM trust had allowed the customer to pursue a 2009 personal injury lawsuit in Florida during the automaker’s bankruptcy, even though most suits were stopped, Judge Schofield said. The car owner asked Judge Gerber to rule on his claim after the Florida court dismissed his suit last year, saying that he was a “vexatious litigant,” according to a filing yesterday in U.S. Bankrupty Court in Manhattan. In his suit, the customer demanded compensation from GM’s predecessor for “personal injury, conspiracy, fraud, gross negligence, strict liability, [and] punitive damages,” arising from an alleged defect in his previously owned Hummer H2 vehicle, according to the filing. http://www.bloomberg.com/news/print/2014-05-21/old-gm-customer-loses-ap…
In related news, General Motors Co. Chief Executive Officer Mary Barra returned to Washington, D.C., to brief lawmakers on the automaker’s internal investigation of an ignition-switch defect linked to 13 fatalities, Bloomberg News reported yesterday. Barra met yesterday with lawmakers from both chambers of Congress. The head of the largest U.S. automaker, who testified during two days of hearings beginning April 1, updated lawmakers on the probe being led by Jenner & Block LLC Chairman Anton Valukas. GM hired the former federal prosecutor to determine why the company took years to recall 2.59 million small cars to fix a faulty switch linked to air-bag failures. http://www.bloomberg.com/news/print/2014-05-21/gm-s-barra-makes-return-…
General Motors issued four new recalls yesterday, bringing its total for the year to 13.5 million vehicles, already the most in the company’s history, the New York Times reported today. The recalls — including 2.4 million cars, trucks and sport utility vehicles involved in Tuesday’s actions — represent an extraordinary about-face for the nation’s largest automaker. Since February, GM has been under intense pressure from federal officials, safety advocates and consumers for its decade-long failure to fix cars with a defective ignition switch that G.M. has linked to 13 deaths.
General Motors Co. agreed to pay a $35 million fine to settle a U.S. auto-safety investigation that found GM had schemed to keep secret its information on faulty ignition switches installed on 2.6 million vehicles, the Wall Street Journal reported on Saturday. U.S. regulators for the first time disclosed details of the probe, including revealing that the Detroit company had coached workers against using "defect" and "Corvair-like" in communications. They also said the nation's largest auto maker had information that should have allowed it in 2009 to link the defective switches to air bags not inflating during crashes. The automaker's "decision making, structure and process stood in the way" of communicating safety problems, said David Friedman, acting administrator of auto-safety regulator National Highway Traffic Safety Administration. GM's employee training even "discouraged workers from using terms like defect, dangerous and safety related," he added.
