Marcal Settles Federal Pollution Claim

Source: The Record (Hackensack, NJ), July 27, 2007
By: Alex Nussbaum

Marcal Paper Mills Inc. will pay the federal government about $1.5 million under a proposed settlement of a pollution claim against the company.

Details of the agreement were filed in federal Bankruptcy Court in Newark on Thursday, a month after the government leveled a nearly $1 billion claim against the business for its alleged role in polluting the Passaic River.

The two sides reached a tentative deal two weeks ago, though no terms were announced at the time. The settlement removes a major obstacle to the Elmwood Park company’s plans to climb out of bankruptcy, its attorney said Thursday.

“We’re extraordinarily pleased that we could resolve this,” Michael Sirota said.

The settlement actually calls for Marcal to pay $3 million to the Environmental Protection Agency and two other agencies. But under the bankruptcy reorganization plan, the government, like Marcal’s other creditors, can expect to get about 50 cents on the dollar for its debts.

The money will go toward cleanup efforts in the lower Passaic, said Alan J. Steinberg, the EPA’s regional administrator.

Still outstanding is an $816,000 claim against Marcal by 73 companies that have already agreed to contribute to the cleanup. Marcal has asked a judge to throw out that claim, but a hearing on the matter scheduled for today has been postponed, Sirota said.

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