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Philadelphia, City of v. Stepan Chem. Co.

Citation: 19 ELR 21322
No. Nos. 81-0851, 83-5493, 713 F. Supp. 1491/29 ERC 1917/(E.D. Pa., 05/01/1989) Trustees not liable

The court holds that the trustees of a trust that had owned a company that generated hazardous waste found at a city landfill are not liable to the city for its response costs under the Comprehensive Environmental Response, Compensation, and Liability Act. The city alleged that the trustees failed to "wind up" the affairs of the company properly before transferring its assets to the trust. The court first holds that the city is not a corporate creditor of the company. There was no debt due to the city at the time the company was liquidated, nor was there any legal claim pending against it. The city's letters to the company seeking a commitment to help clean up the waste were insufficient to make it a creditor at the time the company was dissolved. The court next holds that the trust is not liable as the successor to the company. Pennsylvania law provides that when one company sells or transfers all of its assets to another, the transferee does not become liable for the debts and liabilities of the transferor. While Pennsylvania law provides four exceptions to this general rule, there is no evidence that any of them apply in this case.

[Other decisions in this case appear at 12 ELR 20915, 14 ELR 20007, 18 ELR 20133, and 19 ELR 21319.]

Counsel for Plaintiff
Thomas Wamser, Chief Ass't City Solicitor
15th Fl., Municipal Services Bldg., Philadephia PA 19107
(215) 686-5230

Counsel for Defendant
Antoinette Stone
Fox, Rothschild, O'Brien & Frankel
2000 Market St., 10th Fl., Philadelphia PA 19103
(215) 299-2000