GM

Old GM settles $51M in pollution claims

AP News
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Posted: Mar 07, 2011 4:09 PM
Old GM settles $51M in pollution claims

The U.S. Attorney's Office and the Environmental Protection Agency have reached a $51 million deal to settle a group of environmental claims against the old General Motors Corp.

The deal, which covers 34 sites in 11 states, is the eighth settlement with old GM for pollution claims worth more than $800 million. Remaining claims are capped at $250 million, a spokeswoman for the U.S. Attorney's Office said.

General Motors was split in two when it emerged from bankruptcy protection in July of 2009. Old GM, now called Motors Liquidation Co., got much of GM's debt, closed factory sites and liabilities, while General Motors Co. emerged as the new company making cars and trucks.

The U.S. Attorney for the Southern District of New York and the EPA said in a joint statement Monday that the EPA will get more than $36 million worth of environmental claims. They'll be paid from the sale of stock and warrants in the new General Motors and bonds posted by the Old GM to cover cleanup work. The EPA will get $4.6 million in cash and $10.5 million worth of remedial work from companies that issued the bonds, the statement said.

The sites covered by the latest settlement weren't owned by GM, but the automaker either sent waste to them or owned the sites prior to its bankruptcy, the spokeswoman said.

According to documents outlining the latest settlement, among the largest claims are:

_$10.5 million worth of work to be done by a bond company on the Waukegan Manufactured Gas & Coke Superfund site in Lake County, Ill., near Chicago.

_$7.5 million on the Tremont City Barrel Fill site in Clark County, Ohio, north of Dayton.

_$7 million for the Valleycrest Landfill site in Dayton, Ohio.

_$4.2 million for the "Chevy in the Hole" site in Flint, Mich.

_$4 million for the South Dayton Dump & Landfill site in Montgomery County, Ohio.

_$2.7 million for the Massena Superfund site in Massena, N.Y., in St. Lawrence County.

_$2.5 million for the 68th Street Dump Superfund site in Baltimore County, Maryland.

_$2.3 million for the Operating Industries, Inc. Landfill Superfund site in Los Angeles County, Calif.

Last week, U.S. Bankruptcy Court Judge Robert Gerber in New York said he would approve a plan to liquidate all of Motors Liquidation's assets.

The plan creates four trusts to handle the work. An environmental trust will provide $536 million to clean up old sites. In some cases, environmental remediation will continue for as long as 100 years, the company said.

A separate trust will distribute GM stock to some creditors. More than $275 billion in claims have been filed against GM since its bankruptcy, but most have been resolved. Motors Liquidation owns 10 percent of GM's common stock, or 150 million shares, plus warrants that can be exercised for 15 percent more.

Other trusts will handle asbestos claims and litigation-related claims.

Shares of GM fell 69 cents, or 2.1 percent, to $31.70 Monday. That's $1.30 below GM's initial public offering price of $33 from back in November.

Motors Liquidation said it has sold or secured sale agreements for 14 properties, including a Wilmington, Del., assembly plant that was sold to Fisker Automotive Inc. to produce hybrid vehicles, a Pontiac, Mich., plant that will become a movie studio, and a Strasbourg, France, plant that was sold back to GM.

GM went through bankruptcy with a $49.5 billion government bailout. When it emerged, the government ended up with a 61 percent stake. The government's share was cut to 33 percent after an initial public offering in November.