Exide, California board reach agreement on Vernon environmental issues

By Jim Witters

Wilmington, Del., Oct. 15 - Exide Technologies Inc. has reached agreement with the State of California Department of Toxic Substances Control concerning environmental issues at Exide's Vernon, Calif., plant that will allow the plant to stay open while capital improvements are made, according to an Oct. 14 filing with the U.S. Bankruptcy Court for the District of Delaware.

The Vernon plant is a secondary lead-recycling facility that the CDTSC closed this past spring, citing unsatisfactory controls on pollution.

The suspension order alleged that the Vernon facility's underground storm-water system was not in compliance with state requirements and that the debtor's furnace emissions were not meeting applicable health-risk standards.

The company was able to reopen the plant in July after a favorable ruling by the Los Angeles Superior Court.

Negotiations continued with the regulatory agency, resulting in the proposed settlement agreement.

"The debtor recycles approximately 20,000 to 40,000 batteries per day at the Vernon facility to recover lead. ... The Vernon facility's continued operation is important not only as a key piece of the debtor's ongoing business, but also as a general environmental matter," the filing states.

Settlement terms

Under the proposed settlement:

• Exide will begin installing additional air filtration systems, modifying existing filters, and adding a thermal oxidizer to further reduce emissions and associated health risks by September 2014;

• Exide will remove older storm water pipes, excavate soils, and install a new piping system by December 2013;

• Exide will conduct soil and dust sampling in 2014;

• Exide will work with the county health department to offer blood lead testing;

• Exide will provide CDTSC with financial assurance in the form of a segregated account to be maintained by Exide in the amount of $7.73 million (less any amounts previously spent).

The fund will be used to pay for the costs and expenses of work completed under the stipulation;

• CDTSC will agree that the stipulation constitutes full settlement of the allegations in the suspension order and provide Exide a covenant not to sue as to any known claims based on the allegations of the suspension order and the accusation.

Specifically, the CDTSC will dismiss the order for temporary suspension with prejudice and waive its right to any further proceedings on the accusation; and

• CDTSC will establish compliance guidelines giving the debtor clarity with regard to its ongoing compliance and permitting obligations.

A hearing on the proposed settlement is scheduled for 3 p.m. ET on Nov. 5.

Exide Technologies, a Milton, Ga.-based maker and recycler of lead-acid batteries, filed for bankruptcy on June 10. Its Chapter 11 case number is 13-11482.

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