Environmental Protection

Dana Corp. to Allow $24 M Bankruptcy Claim for Cleanup Costs

Dana Corp., a Toledo, Ohio-based auto parts manufacturer, has agreed not to contest more than $125 million in environmental claims brought by the federal government for cleanup costs and civil penalties associated with six Superfund toxic waste sites in five states, including a claim of more than $24 million related to a former auto parts manufacturing facility in Hastings, Neb., according to a June 18 press release.

Under terms of a legal settlement, Dana Corp. and 40 of its affiliated companies agreed not to contest the series of monetary claims brought by the U.S. Environmental Protection Agency, the U.S. Department of Commerce, and the U.S. Department of Interior, in Dana's pending bankruptcy proceedings.

The claims include $24,290,000 in EPA's environmental claims related to the West Highway 6 & Highway 281 Superfund site in Hastings, where Dana owned and operated an auto parts manufacturing plant from approximately 1978 to 2002.

Dana filed petitions under Chapter 11 of the U.S. Bankruptcy Code in May 2006. Under terms of this settlement, Dana will withdraw its previous legal objections to the United States' pursuit of more than $125 million in environmental claims against the company. Those claims, which now may be eligible for recovery under Dana's pending court-approved plan of reorganization, are for cleanups and penalties at the Hastings site and at Superfund sites located in South Plainfield, N.J.; Southington, Conn.; Claypool, Ind.; Elkhart, Ind.; and Tremont City, Ohio.

At the Hastings site, EPA alleged that volatile organic compounds, including the hazardous substance tetrachloroethylene (known as PCE), were released into the environment during Dana's plant operations. PCE is a colorless liquid used for a number of commercial purposes, including dry cleaning and degreasing. Exposure to PCE may result in damage to the liver, kidneys and central nervous system.

This week's legal settlement with Dana Corporation has been lodged in U.S. District Court for the Southern District of New York, and is subject to a 30-day period of public comment.

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