Allnex Can’t Escape Liability for Chemical Plant Cleanup

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By Steven M. Sellers

Chemical manufacturer Allnex (Luxemborg) & Cy S.C.A. is liable for $35.1 million in cleanup costs for toxic spills at a chemical plant it bought from Cytec Industries Inc., a federal district court ruled June 19 ( Cytec Indus. Inc. v. Allnex (Luxembourg) & Cy S.C.A. , 2017 BL 208769, S.D.N.Y., No. 14-cv-1561, 6/19/17 ).

The U.S. District Court for the Southern District of New York granted summary judgment to Cytec and resolved a contractual dispute over whether Allnex must pay to remediate hazardous discharges dating to the 1940s or only more recent spills at the plant.

Allnex agreed to the “unambiguous language” of the purchase agreement in which it assumed “broad” liability for claims “related to, or used and held in connection with” the business, the district court said.

Allnex’s parent company, Advent International Corp., bought the plant in Kalamazoo, Mich., in 2013 as part of its purchase of a coating resins business owned by Cytec, according to the decision.

But the companies soon disputed the extent of their liability under the contract—particularly for decades-old spills of sulfuric acid and liquid alum at the site—and Cytec sued.

Both parties were aware of the historical uses of the plant when they executed the purchase agreement, which “comfortably includes historical liabilities, such as those subject to remediation in Kalamazoo,” the court said.

The contract also expressly carved out liability for plants in other states, further supporting the conclusion that Allnex was liable for cleaning up the Michigan facility, the court said.

U.S. District Judge P. Kevin Castel wrote the opinion.

The law offices of Sullivan & Cromwell represented Cytec.

Goodwin Procter as well as Freshfields Bruckhaus Deringer represented Allnex.

For More Information

The opinion is available at http://src.bna.com/p1s.

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