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In re In re FCX, Inc.

Citation: 19 ELR 20849
No. No. S-85-01574-5, 96 B.R. 49/(Bankr. E.D.N.C., 02/03/1989) Abandonment, admin. expense priority

The court holds that a debtor in bankruptcy may abandon a site where it operated a pesticide plant if the estate pays $ 250,000 for removal of pesticides buried at the site. The court initially observes that, while it may not substitute its judgment for that of the Environmental Protection Agency (EPA) or the state as to whether there has been a violation of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) or state law, the court alone must determine whether there is an immediate danger to public health. Under this circuit's case law, abandonment is not allowed where there is such an immediate threat to public health. The court holds that the burial of five tons of pesticides in an uncontrolled condition presents an immediate threat to area residents. Although the threat may not be fully manifested for several years, the danger is immediate because there is a present possibility of exposure if the chemicals are not removed. The delay by EPA and the state in commencing an enforcement action, while some evidence that the governments did not consider the site to pose an immediate danger, is not conclusive. The court concludes that only those costs reasonably required to remove the immediate threat, not all costs required by CERCLA, will be given administrative expense priority. The governments will have a lien on the property for the costs of any further cleanup activity.

Counsel for Debtor
William H. McCullough
Adams, McCullough & Beard
One Exchange Plaza, P.O. Box 389, Raleigh NC 27602
(919) 828-0564

Counsel for Federal Government
Jon Mueller
Land and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 633-2000