TRANSMITTAL LETTER FOR BOARD MEETING OF OCTOBER 6, 2016
COMMITTEE ON JUDICIARY
Mr. David St. Pierre, Executive Director
Title
Authority to enter into a settlement agreement and mutual general release with the trustee for Blue Island Phenol regarding unpaid 2013 User Charges at issue in the Assignment for the Benefit of Creditors
Body
Dear Sir:
Blue Island Phenol (“Blue Island”) was a User in the Metropolitan Water Reclamation District of Greater Chicago (“District”) User Charge system when it filed for an Assignment for the Benefit of Creditors (“assignment”) on March 12, 2014.
Blue Island operated a phenol processing plant located in Alsip in unincorporated Cook County, Illinois. On December 13, 2013, there was a fire and explosion at the plant. On December 31, 2013, Blue Island agreed with the Illinois Attorney General’s Office to enter into an injunction not to reopen the plant until the exact cause of the December 13th incident was determined. Shortly thereafter, its parent company made the decision to permanently close the plant.
After the District was notified regarding the assignment, the trustee made $50,000.00 in payments to the District. An Amended Affidavit of Claim was filed for unpaid user charges in the amount of $206,157.61 on January 25, 2016.
There are several additional creditors involved in this matter. Based on the representation by the trustee, there is approximately $200,000.00 available to distribute pro-rata to all the creditors. Based upon the $50,000.00 payment that the District has already received, and the pro-rata method of distribution, the amount received by the District exceeds its pro rata share.
In order to avoid the expense of further litigating this matter, Blue Island has offered to enter into a settlement agreement and mutual general release, whereby the District would accept the prior payment in full satisfaction of its claim, and the Trustee would waive any claims against the District for overpayment. Given the expense of litigating the issue, and the likelihood of not recovering additional funds, it is the recommendation of the General Counsel that this matter be settled.
The Monitoring and Research and Finance Departments are in agreement with settlement of the District’s claim under the terms of the offer from the Trustee.
Therefore, the General Counsel respectfully requests that the Board of Commissioners grant authority to enter into a settlement agreement and mutual general release with the trustee for Blue Island Phenol regarding unpaid 2013 User Charges at issue in the Assignment for the Benefit of Creditors, and to execute such documents as may be necessary to effectuate settlement.
Requested, Ronald M. Hill, General Counsel, RMH:LLD:JJZ:YAT:nm:bh
Respectfully Submitted, Mariyana Spyropoulos, Chairman Committee on Judiciary
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for October 6, 2016