Marcal Paper Mills' asset purchasers agree to Diamond Alkali Superfund site clean-up settlement

By Caroline Salls

Pittsburgh, May 19 - Marcal Paper Mills, Inc. and the buyers of substantially all of its assets have reached a $1.5 million environmental claim settlement tied to cleanup efforts at the Diamond Alkali Superfund site on the Passaic River, according to a Friday filing with the U.S. Bankruptcy Court for the District of New Jersey.

The parties to the agreement include Marcal, buyer NexBank, SSB and its Marcal Paper Mills, LLC and Marcal Manufacturing, LLC entities and the United States on behalf of the Environmental Protection Agency, the Department of the Interior and the National Oceanic and Atmospheric Administration.

The asset sale includes Marcal's Elmwood Park, N.J., paper recycling mill. According to the filing, the agencies claim there are hazardous substances on the Elmwood Park property.

Under the settlement, the buyers have agreed to fully comply with New Jersey Department of Environmental Protection requirements under a remediation agreement.

In the interim period between approval of the settlement and the start of remedial work on the site, the buyers have agreed not to do anything that would exacerbate the existing contamination.

The buyers are also required to submit a plan detailing the steps they will take to prevent any future release of hazardous substances at the site.

Following approval of the plan by the environmental agencies, the buyers will be responsible for completing the clean-up work.

In addition, the buyers have agreed to make a $1.5 million settlement payment to the United States on behalf of the other environment agencies, with $1.08 million of the payment to go to the EPA for costs related to hazardous substance response and $420,000 earmarked for the DOI and NOAA.

If the purchasers do not complete the work, they will pay an additional $500,000 to reimburse the EPA for completing the clean-up.

Marcal Paper Mills, an Elmwood Park, N.J., manufacturer and distributor of bath tissue, kitchen towels, napkins and facial tissue, filed for bankruptcy on Nov. 30, 2006. Its Chapter 11 case number is 06-21886.

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