Lyondell deal would short change cleanup - US Congressmen

23 April 2010 00:18  [Source: ICIS news]

HOUSTON (ICIS news)--A proposed legal settlement between LyondellBasell and environmental regulators in the US would short change efforts to clean up a section of the Kalamazoo River, according to three members of Congress from Michigan.

Members of the Michigan Congressional delegation sent a letter this week to the US Department of Justice expressing their concern with a proposed $162m (€122m) settlement with Lyondell, saying the amount Lyondell “falls well short of what is necessary to remove harmful PCBs [polychlorinated biphenyls] from the Kalamazoo River and Allied Landfill”.

“I am committed to the full cleanup of the Kalamazoo River Superfund project, which is the largest in the state of Michigan,” said Senator Carl Levin (Democrat-Michigan). “I don’t think Lyondell Chemical Company should be allowed to reorganise in bankruptcy in a way that allows them to shed 90% of their environmental responsibility.”

“More specifically, the settlement allocates only $103m for LyondellBasell’s share of the cleanup of the Kalamazoo River Superfund site; a sum the company estimated in court documents to be as high as $2.5bn,” according to the letter to the Department of Justice.

Senator Debbie Stabenow (Democrat-Michigan), and Representative Fred Upton (Republican-Michigan) also voiced their concerns.

The Kalamazoo settlement was part of a much larger $1.35bn deal that Lyondell reached with US and state environmental regulators.

The $1.35bn deal was made up of several parts.

Lyondell would allow the regulators to have $1.18bn in unsecured claims. In general, creditors recover only a portion of their unsecured claims.

In addition, Lyondell would pay $108.4m to a trust that will clean up several contaminated sites.

Another $61.6m would go to US and California regulators.

In all, the money would pay to clean up at least 15 sites in eight states, based on a statement by the US Attorney's Office.

Some regulators could receive more money if Lyondell receives proceeds from pending insurance claims.

A hearing for the settlement was scheduled for Friday.

On the same day, the court was scheduled to confirm Lyondell's reorganisation plan. Lyondell could leave bankruptcy after the court confirms its plan.

($1 = €0.75)

Additional reporting by Al Greenwood

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