[NJARC] Don't be cavalier, ask for Cornell-Dubilier

[john ruccolo]

NJARC Folks,

FYI.

JR

Dana Says Government Shares Blame For Toxic New Jersey
Site

Dow Jones International News Service via Dow Jones

 
   By Joseph Rebello 
   Of DOW JONES NEWSWIRES 
 

  Dana Corp. (DCNA) wants the U.S. government to pick
up some of the $250
million cost of cleaning up a toxic factory site in
South Plainfield, N.J.,
arguing the Defense Department oversaw the factory
during World War II, when
much of the contamination occurred. 

  In papers filed with the U.S. Bankruptcy Court in
Manhattan, the auto-parts
company asked a judge to reject the government's
environmental-damage claims
against it. It said most of the $300 million in
clean-up costs the government is
seeking are related to the South Plainfield site,
which the Environmental
Protection Agency lists among the country's most
hazardous. 

  The government hasn't accused Dana of contaminating
the site - the actual
contamination, according to court papers, occurred
after Dana stopped
manufacturing at the site in 1929 and leased it to
Cornell Dubilier Electronics
Inc. 

  The EPA has said Cornell Dubilier "dumped material
contaminated with
polychlorinated biphenyls (PCBs) and other hazardous
substances directly onto
site soils." 

  Still, the government contends Dana is liable for
the entire clean-up cost
simply because Dana owned the site at the time of the
contamination. 

  In its court papers, Dana said the government's
claim is unfair because "it
effectively seeks to shift the government's own
liability to Dana." 

  The company, based in Toledo, Ohio, said the
government played a key role at
the Cornell Dubilier site for much of the period
during which the alleged
contamination occurred -between 1929 and 1956. 

  Cornell Dubilier makes capacitors and other
electronic components. During
World War II, the Defense Department was "pervasively
involved" in the
operations of the South Plainfield factory, Dana said,
citing a memorandum
written to the EPA by a Cornell Dubilier attorney in
2004. 

  The attorney, Robert S. Sanoff, said the Defense
Department "pushed
aggressively" to increase the production of capacitors
at the factory. He also
said that pressure to address "urgent war needs" may
have caused "substantial
releases to the environment of the raw materials used
in the manufacturing
process." 

  Under the circumstances, Dana said, "to the extent
that there was any
contamination that occurred while Dana owned the
site," Cornell Dubilier and the
Defense Department "caused the contamination." 

  Dana said the size of the environmental claims could
also "significantly
impact creditor recoveries" under its proposed
reorganization plan. A $250
million increase in the size of the pool of general
unsecured claims could cut
recoveries by 6% to 8%, the company said. Unsecured
creditors are slated to
recover about 69 cents on the dollar under Dana's
Chapter 11 plan. 

  Moreover, Dana said, the fight over environmental
liabilities threatens to
delay the company's exit from bankruptcy proceedings.
The company, which began
its Chapter 11 reorganization in March 2006, has said
it aims to complete that
process by the end of the year. 

  Dana said the government's environmental claims are
among largest against the
company. As a result, they could have a "substantial
impact" on the company's
bid "to emerge from Chapter 11 by their stated goal at
the end of 2007." 

  -Joseph Rebello, Dow Jones Newswires; 202-862-9279;
joseph.rebello at dowjones.com 
 

  (END) Dow Jones Newswires

  10-09-07 1955GMT

  Copyright (c) 2007 Dow Jones & Company, Inc.





       
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