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In re Flintkote Co.

United States District Court, D. Delaware

January 16, 2015

IN RE: THE FLINTKOTE COMPANY, et al., 8 E. FREDERICK PLACE, LLC, Appellant,
v.
THE FLINTKOTE COMPANY and FLINTKOTE MINES LIMITED, Appellees

Page 888

Bankr. Case No. 04-11300-JKF.

For The Flintkote Company, Debtor: James E. O'Neill, III, Pachulski, Stang, Ziehl & Jones, LLP, Wilmington, DE.

For 8 E. Frederick Place LLC, Appellant: Learon John Nelson Bird, LEAD ATTORNEY, Fox Rothschild LLP, Wilmington, DE.

For The Flintkote Company, Flintkote Mines Limited, Appellees: Laura Davis Jones, LEAD ATTORNEY, James E. O'Neill, III, Pachulski, Stang, Ziehl & Jones, LLP, Wilmington, DE.

Page 889

MEMORANDUM

Leonard P. Stark, UNITED STATES DISTRICT JUDGE.

Pending before the Court is 8 E. Frederick Place, LLC's (" Appellant" ) appeal from the Bankruptcy Court's July 6, 2012 Order (the " Order" ) and accompanying Memorandum Opinion (the " Opinion" ) entered in In re Flintkote Co., 475 B.R. 400 (Bankr. D. Del. 2012), granting Debtors' Motions for Summary Judgment, sustaining Debtors' Objection to Claim 2242, and Denying Appellant's Motion for Relief from Stay. (D.I. 1) For the reasons discussed, the Court will affirm the Bankruptcy Court's Order.

1. Background.[1] The Flintkote Company and Flintkote Mines Limited (the

Page 890

" Debtors" ) filed a petition for chapter 11 bankruptcy relief in the U.S. Bankruptcy Court for the District of Delaware on May 1, 2004. On February 16, 2005, Appellant filed claim number 2242 (the " Claim" ) against the Debtors' bankruptcy estate for an " unknown" amount of damages due to alleged " site contamination." (D.I. 19 at SA193) The Claim represents an underlying dispute over responsibility for pollution on a 6.5 acre parcel of land in Cedar Knolls, New Jersey, that Appellant has owned since 1984 (" the Property" ). (D.I. 16 at 6) From 1945 to 1972, Debtors owned and operated a rubber manufacturing facility on the Property. (D.I. 18 at 4)

2. In 1994, Debtors and the New Jersey Department of Environmental Property (the " NJDEP" ) entered into a Memorandum of Understanding for the purpose of investigating for areas of environmental concern on the Property. (D.I. 17 A466) The investigation exposed several potential areas of concern. ( Id.) The Debtors have been expending some effort to remediate these areas of concern under the NJDEP's oversight, although the parties disagree as to the extent and sufficiency of such remediation. (D.I. 16 at 6-8; D.I. 18 at 4-6)

3. On September 17, 2007, Debtors filed a non-substantive objection to Appellant's Claim. (D.I. 17 at A8-21) This prompted a stipulation between the parties, whereby: Debtors withdrew their non-substantive objection in return for Appellant releasing all potential common-law claims and limiting its Claim to the following six statutes: (1) the New Jersey Environmental Rights Act (" ERA" ), N.J.S.A. 2A:35A-1 et seq. ; (2 ) the New Jersey Spill Compensation and Control Act (" Spill Act" ), N.J.S.A. 58:10-23.11 et seq.; (3) the New Jersey Industrial Site Recovery Act (" ISRA" ), N.J.S.A. 13:1K-6 et seq.; (4) the New Jersey Water Pollution Control Act (" NJWPCA" ), N.J.S.A. 58:10A-1 et seq.; (5) the federal Comprehensive Environmental Response, Compensation, and Liability Act (" CERCLA" ), 42 U.S.C. 9601 et seq.; and (6) the federal Water Pollution Control Act (" Clean Water Act" ), 33 U.S.C. 401 et seq. (collectively, the " Environmental Statutes" ). (D.I. 17, A69-77)

4. On May 23, 2011, Appellant filed a Motion for Relief from Stay (the " Stay Relief Motion" ) pursuant to 11 U.S.C. § 362(d)(1). Appellant alleged that it had " cause" to lift the stay under § 362(d)(1) because it intended to file suit in New Jersey state court to force Debtors to further remediate the Property. (D.I. 17 A079-095) On June 20, 2011, Debtors filed a substantive objection to Appellant's Claim. (D.I. 17 A122-140) On October 6, 2011, Debtors filed two motions for summary judgment, one objecting to Appellant's Claim, and another with respect to Appellant's Stay Relief Motion. (D.I. 17 A228-272)

5. The parties briefed the issues and the Bankruptcy Court held a hearing on the summary judgment motions on January 23, 2012. After supplemental briefing, the Bankruptcy Court issued its Opinion and Order granting Debtors' two summary judgment motions and denying Appellant's Stay ...


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