Delinquent Polluters Must Pay New Jersey Superfund Cleanup Costs

Under the settlement filed Thursday in federal court in Trenton, the two companies will pay more than $1 million and Imperial's two former officers, Scott Stevens and George Kulick, will pay $360,000 to satisfy the companies' obligations according to a 2001 legal settlement called a consent decree.

The 2001 consent decree resolved the companies' liability under the Comprehensive Environmental Response, Compensation and Liability Act for past cleanup costs incurred by the United States and the state of New Jersey in connection with the site.

Imperial/Champion Superfund site (Photo courtesy EPA)

According to the 2001 decree, the companies committed to make future monthly and annual payments based on Imperial's gross profits.

On March 29, 2007, the United States filed a motion to enforce the 2001 decree, seeking more than $1 million in payments that Champion and Imperial failed to make, as well as penalties.

The United States also filed a claim under the Federal Debt Collection Procedures Act against Stevens and Kulick, alleging that excessive salaries they received beginning in 2001 constituted fraudulent conveyances from Imperial of assets that should have been paid to the federal government.

The 15-acre site located in Monmouth County contained a facility that operated an oil reclamation process. Prior to Imperial Oil, other companies operated at the site, including a chemical processing plant which produced arsenical pesticides, followed by a manufacturer of flavors and essences.

The site contains a contaminated pond and a stream to the north, Birch Swamp Brook, that flows through a bog northwest of the site and then drains into Lake Lefferts, located 1.25 miles to the north. Wetlands and wooded areas are nearby.

The ground water at the site is contaminated by volatile organic compounds, or VOCs, polychlorinated biphenyls, or PCBs, and metals, among other contaminants.

Soil contamination consists of elevated levels of VOCs, semi-volatile organic compounds, petroleum hydrocarbons, PCBs, pesticides and the metals arsenic and lead. The surrounding wetlands are also affected.

Since 1991, the site has been addressed by EPA and the New Jersey Department of Environmental Protection. EPA has conducted numerous cleanup activities at the site, including the removal of a waste clay pile and soil from adjoining residential properties that was contaminated with arsenic.

In December 2007, remedial funding was authorized for the removal and disposal of product, feedstock and waste materials, and associated tanks, pipelines, drums and containers. In January 2008, these activities were expanded to include the demolition and off-site disposal of buildings and structures which remain at the site.

"Under Superfund, parties responsible for damaging the environment are required to pay for the cost of the toxic cleanup," said EPA Regional Administrator Judith Enck.

She said, "This New Jersey case is a testament to EPA's hard work to uphold a basic principle of the Superfund law - the polluter pays."

Under the settlement filed Thursday with the court and subject to court approval, the United States will receive all of the net proceeds from the sale of the site, which is owned by Champion, and proceeds from the companies' remaining insurance coverage, in addition to the $1.4 million payment.

The U.S. Justice Department and Environmental Protection Agency said the settlement ensures that the United States will receive all remaining non-bankruptcy assets of both Imperial, which is in Chapter 7 bankruptcy, and Champion, which is a dormant company with no assets other than the site.

"The United States expects parties to honor their consent decree obligations and any failure to do so is a very serious violation," said Ignacia Moreno, assistant attorney general for the Justice Department's Environment and Natural Resources Division. "This agreement will ensure that Champion, Imperial and their corporate officers live up to their prior obligations."

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