New York, NY July 22--The city can recoup $40 million in asbestos cleanup costs from a bankrupt building supply company, a federal bankruptcy judge has ordered, according to the New York Daily News.
The city sued Celotex Corp., the manufacturer and distributor of building supplies and asbestos-laden vinyl flooring installed long ago in more than 400 city buildings, mostly in public schools.
The city argued that asbestos in the building supplies could become airborne when damaged or through normal wear and tear, and so launched a systematic plan to remove or contain the material.
Celotex filed for Chapter 11 bankruptcy protection in 1990, but its trustees fought the city's efforts to tap into the bankrupt company's roughly $1 billion inassets.The city received more than $9 million in payments for 73 claims, but Celotex balked on paying on hundreds of others.
New York started filing claims in U.S. Bankruptcy Court in Tampa in 2000 to shake the money loose.
Chief Bankruptcy Judge Paul Glenn, in a 39-page ruling issued Thursday, said the Celotex Trust had to pay up.
"What the judge basically did was say that the 1996 bankruptcy plan stands and the trustees can't change the rules now," said city lawyer Alan Kleinman, who pushed the claims with fellow counsel Morton Marshack.
The Celotex money will cover about a third of the costs to clean up and remove the materials from the buildings, city officials estimated.
