Armstrong Strikes Deal with EPA

Lancaster PA, October 26, 2006--Armstrong World Industries has agreed to pay part of the government’s tab for cleaning up 16 landfills nationwide that it allegedly used, according to the Lancaster New Era. Armstrong will give undetermined millions of dollars to the U.S. Environmental Protection Agency, to compensate EPA for the costs, court records show. The settlement between the company and the agency, ending three years of negotiations, was signed Friday by U.S. Bankruptcy Judge Judith K. Fitzgerald. The accord calls for the EPA: To file a claim of $8.7 million against Armstrong for its alleged use of the 16 sites. Nearly all of the claim -- $7.8 million -- concerns a Superfund site in Lincoln, R.I. However, under the bankruptcy process, Armstrong will end up paying only a percentage of the unsecured claims such as EPA’s that are filed against it. That percentage isn’t set yet. -To seek no more money from Armstrong to clean up three sites, including the closed Elizabethtown Landfill on West Ridge Road. Armstrong already has paid $146,000 to the EPA for cleanup costs there. -To grant Armstrong full protection from any existing and future claims from other parties for payment toward any cleanup costs at the above 19 sites. -To make no claims against Armstrong regarding its alleged use of 18 other sites. These include the former Lancaster Battery site on Harrisburg Pike and Berkley Products’ former site on Swamp Bridge Road near Denver. An official familiar with the agreement said the EPA made no claims regarding those sites because the agency determined Armstrong’s use was negligible or non-existent. The agreement also calls for Armstrong to remain one of 35 companies funding the Malvern Superfund site cleanup. Armstrong has paid $24,000 toward that effort so far. The court papers did not say what kinds of hazardous materials Armstrong allegedly sent where, how much material was sent or when it was sent. An EPA spokesman said those details were not immediately available. An Armstrong spokeswoman could not be reached for comment. EPA initially sought $337 million from Armstrong, alleging Armstrong was liable for costs incurred by EPA while cleaning up hazardous waste that Armstrong sent to seven sites. Armstrong disputed it. That led to extensive talks aimed at reaching a “global” settlement of Armstrong’s environmental liabilities, rather than litigate EPA’s claims on a site-by-site basis. Both sides analyzed how much waste at a given site allegedly was sent by Armstrong and the toxicity of Armstrong’s waste, compared to waste sent by other firms. Then, to arrive at Armstrong’s portion of the cleanup cost, those figures were multiplied against EPA’s total cleanup cost, past and projected. In its court papers asking Fitzgerald to approve the settlement, Armstrong said the pact was consistent with federal law while avoiding the cost and risk of taking EPA to court.

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