GM’s bankruptcy estate to pay $773 million to clean up 89 plant sites
21 Oct 2010
The bankruptcy estate of the US car maker General Motors, Motors Liquidation Co (MLC) yesterday arrived at a $773-million deal with the US Department of Justice (DoJ) to clean up hazardous waste on its old plant sites in several states and make them ready for new uses.
Under the deal, which has to be approved by the court, MLC will pay approximately $641.4 million and will contribute additional non-cash assets with an estimated value of $120 million for the cleanup and administration of 89 properties and sites, 59 of which are known to have been contaminated with hazardous substances or waste.
In addition, MLC has spent approximately $11.5 million towards the cleanup of the properties with known contamination during the pendency of GM's bankruptcy proceeding.
The 89 properties in the settlement agreement were excluded from the sale of assets to the New GM, which emerged from bankruptcy protection and continued to be owned and managed by Old GM or MLC.
This settlement covers Old GM's environmental liabilities under various US and state environmental laws at the 89 properties still owned by Old GM in Delaware, Illinois, Indiana, Kansas, Louisiana, Massachusetts, Michigan, Missouri, New Jersey, New York, Ohio, Pennsylvania, Virginia and Wisconsin.
Under the settlement, an environmental response bankruptcy trust will be established to take ownership and possession of the 89 properties and the funding provided to clean the properties up, administer them and return them to beneficial use, said the DoJ in a statement.
Old GM will pay approximately $499 million of the funding to the environmental response trust for environmental cleanup at the properties.
Of this amount, more than $431 million will be placed in site-specific accounts for each of the 59 properties known to have been contaminated with hazardous substances or waste, and approximately $68 million will be placed in a pooled account for environmental cleanup that may arise in the future at any of the 89 properties transferred to the trust on account of unforeseen conditions.
In addition, Old GM will place at least $142 million and certain non-cash assets in the trust to cover the administrative costs of the trust and the return of the properties to beneficial use.
