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U.S. & Illinois Reach Settlement with Bankrupt Laclede Steel to Facilitate Clean-up Before Reopening of Alton, Illinois Mill

Release Date: 01/22/2003
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY


FOR IMMEDIATE RELEASE
WEDNESDAY, JANUARY 22, 2003
WWW.USDOJ.GOV
ENRD (202) 514-2007
EPA (202) 564-7873


WASHINGTON, D.C.(01/22/03) – The Justice Department, the U.S. Environmental Protection Agency (EPA) and the state of Illinois today announced a settlement with the bankrupt Laclede Steel Company that will lead to the sale and partial reopening of the company’s former steel mill in Alton, Illinois. As part of the settlement, Laclede will sell the mill to Alton Steel for $1 million. These funds will be placed in a trust to be used by Alton Steel to perform clean-up activities at the site according to an agreed order of priorities and under the supervision of the EPA and Illinois EPA.

Alton Steel has committed to reopening the facility and bringing it back into compliance with environmental laws, regulations and permits. Additionally, Laclede will place $100,000 in a special Superfund account for later use in cleaning up the site, if necessary.

“This settlement will result in the clean-up of hazardous waste, creation of jobs and enhancement of the corporate tax base of Alton, Illinois,” said Tom Sansonetti, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “This is a win for the environment and the community.”

"This settlement represents a win for the environment and a win for the local economy,” John Peter Suarez, Assistant Administrator for EPA's Office of Enforcement and Compliance Assurance said. “The plant will re-open and it will come into compliance with its permit."

Laclede operated the Alton mill for close to 90 years, before halting operations there as part of its 1998 bankruptcy reorganization. On July 27, 2001, Laclede filed a second bankruptcy petition, this time seeking dissolution rather than reorganization. The United States filed a multi-million dollar claim in the bankruptcy court seeking the funds necessary to clean up the Alton facility were it abandoned by Laclede. In light of the limited size of Laclede’s bankruptcy estate and the size of competing claims, it appeared unlikely that the United States would be able to recover sufficient funds from Laclede to clean up the site without a significant expenditure of public monies.

Since 1998, Laclede has been violating its Resource Conservation and Recovery Act (RCRA) permit. Under the settlement agreement, this permit will be transferred to Alton Steel, which will be responsible for bringing the facility back into compliance with it.

At its peak, Laclede employed in excess of 3,000 workers at its Alton facility and still employed over 600 there at the time of the first bankruptcy. Alton Steel will initially staff the plant operations with approximately 80 hourly employees and expects to expand operations there by the end of the first year to require a total of approximately 222 hourly employees.

Alton Steel was established to acquire certain assets of Laclede and to use those assets for the manufacture and distribution of steel products. Alton Steel’s President, Melvin Cook, was employed by Laclede Steel at the Alton facility from 1955 through 1987. Since 1987, Mr. Cook has engaged in consulting activities with other steel-makers and related industries and co-founded Bluff City Steel, LLC, in Memphis, Tennessee in 1996.

The settlement agreement has been lodged in the United States Bankruptcy Court for the Eastern District of Missouri and is subject to a 30-day public comment period.