Perona Brothers Junkyard Fire Dec. 6th 1986
Tuesday, December 11 2007 @ 06:17 pm EST
Contributed by: CBrining
Enforcement Case Summary
Case: Perona Brothers Junkyard
Elwood, New Jersey
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Background:
Perona Brothers, Inc. operated a junkyard in Elwood, New Jersey, that contained
approximately five million tires and an undetermined number of automobiles, trucks and other
discarded debris, as well as drums and cylinders with materials of unknown origin.
On December 6, 1986, a fire started at the junkyard and lasted for five days. As a result of the fire,
hazardous substances and materials were released on site and discharged into the groundwater.
On October 31, 1986, Perona Brothers, Inc. filed a petition for protection under Chapter
11 (reorganization) of the United States Bankruptcy Code. The trustee in the bankruptcy case
asked the Court to convert the Chapter 11 bankruptcy to a Chapter 7 (liquidation) bankruptcy,
which was granted on June 14, 1989.
Actions:
In 1986, EPA incurred cost to respond to the fire at the junkyard. On June 29, 1989, the
New Jersey Department of Environmental Protection (NJDEP) requested that EPA perform a
CERCLA removal action at the junkyard to remove the hazardous substances and materials that
resulted from the December 1986 fire. EPA incurred costs to conduct this action and requested
that a contingency fund be established to cover any costs that EPA may incur at the site in the
future.
Penalty:
To protect the ability to recover response costs from the potentially responsible party in
this case, EPA filed a Proof of Claim with the bankruptcy court to recover the costs incurred by
EPA prior to 1989 (i.e., approximately $171,000) as well as additional costs that might be
incurred by EPA in the future. At that time, the assets of the junkyard totaled less than $34,000.
The New Jersey District Court ruled that the State of New Jersey had a super priority lien
(pursuant to a state spill act) against the claims of EPA and the bankruptcy trustee. This meant
that the State had priority to the $33,764 in remaining estate assets. Because the State incurred
costs of approximately $100,000 at the site, there was no money left to settle EPA’s claims and
any claims submitted to the trustee after the funds in the estate were used to pay the State.
In
January 1997, the bankruptcy court issued a final decree that discharged the trustee of the estate
and closed the bankruptcy case due to a lack of funds to pay claims. In 1999, EPA chose to
close the case without recovering any of their costs.
Actions to Avoid Violation:
Proper segregation and storage of materials on site, especially flammable materials, could
have either prevented the fire or controlled its spread. Perona Brothers should have implemented
best management practices for removing all fluids and hazardous materials from scrap
automobiles. Perona Brothers should also have installed separate storage areas and containers
for each type of waste generated on site, instead of mixing these in drums of “unknown
material.” The waste storage areas could have been installed under roof and on bermed concrete
pads or liners to prevent storm water runoff and ground water contamination. Segregating
wastes would have allowed for easier recycling and disposal of the wastes, since many waste
haulers, recyclers, or disposal facilities won’t accept wastes of unknown origin. Proper
segregation, storage, and labeling would have also facilitated better response to the fire by giving
responders adequate information as to what types of materials were present on site. If Perona
Brothers had taken these preventive measures, it probably would have been able to limit the
damage to prevent a total loss.
Elwood Fire Rescue
https://www.evfc160.com/main/article.php/20071211121748386