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Tonawanda Coke is walking away from cleanup, prosecutor says

Tonawanda Coke is preparing to abandon its River Road plant and leave the massive cleanup to the federal government, a prosecutor said in court Friday.

The allegation that the company is planning to walk away from its manufacturing site came just three days after it filed for bankruptcy.

"This company is looking to close its doors and hand the keys over to the government," Assistant U.S. Attorney Kevin Robinson said Friday.

Robinson, appearing at Tonawanda Coke's first bankruptcy proceeding, said the government is concerned about the plant's environmental legacy and who should bear the cost of cleaning it up.

Officials from the Environmental Protection Agency are at the plant in order to secure the operation as it shuts down for good.

"They're worried about contamination, as you can imagine," Robinson told U.S. Bankruptcy Judge Michael J. Kaplan.

The government raised questions about Tonawanda Coke's commitment to cleaning up the plant while also raising concerns about its request to spend money in the coming weeks.

Most of the money, about $150,00, would go to pay the 70 workers who were laid off last week and the 30 workers who remain with the company.

"They should not be the victims here," said Garry M. Graber, a lawyer for the company. "We've already had a number of employees walk off the job. We do believe labor unrest will exist."

Graber also noted that none of the money will go officers or directors of the company.

"It's not just window dressing," Ian Hayes, a lawyer for the United Steelworkers, the union representing workers at the facility, told Kaplan at one point. "It's not just rhetoric."

Prosecutors questioned the payments in large part because they are trying to ensure that Tonawanda Coke will make a final $2 million payment to the government. The payment is part of the $25 million in fines the company was ordered to pay as a result of its 2013 criminal conviction for violating the federal Clean Air Act.

In the end, Kaplan agreed the workers should be paid, but made it clear that others, including officers or directors of the company, could ultimately be held liable for the payments.

In court papers, Tonawanda Coke detailed $7 million in liabilities but indicated that figure could increase because of outstanding lawsuits.

The company, in a bankruptcy filing this week, detailed 20 separate lawsuits filed by residents, including a State Supreme Court class action suit with 39,000 potential members.

The court filing provides a glimpse into the potential legal liabilities facing Tonawanda Coke and what bankruptcy protection could mean to residents suing the company because of health and environmental concerns.

The company is expected at some point to request court-approved funds to continue its defense against those lawsuits. It also informed Kaplan that there is no insurance to help cover potential settlements in those suits.

Most of the suits date back several years.

Tonawanda Coke listed the civil lawsuits as part of a document detailing its $7 million in debts, including the $2 million it still owes the federal government.

The company said it also owes $1.7 million to "non-insiders" and $3.3 million to "insiders." Insiders are usually directors or officers in the company or people with close ties to it.

 

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