united states bankruptcy court southern district of new york - astswmo

11-15606-scc

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Filed 08/16/12 Entered 08/16/12 10:23:11 Pg 1 of 11

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UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ----------------------------------------------------------------------------- x : Chapter 11 In re: : : Case No. 11-15606 (SCC) GETTY PETROLEUM MARKETING INC., et al., : : Jointly Administered Debtors. ----------------------------------------------------------------------------- x ORDER AUTHORIZING AND DIRECTING DEBTORS TO ABANDON CERTAIN UNDERGROUND AND ABOVEGROUND STORAGE TANKS UPON CERTIFICATION OF FULFILLMENT OF ABANDONMENT CONDITIONS Upon the Motion for an Order Authorizing and Directing Debtors to Abandon Underground and Aboveground Storage Tanks [Dkt. No. 542] (the “Motion1”), filed by the Official Committee of Unsecured Creditors (the “Committee”), appointed in the chapter 11 cases of Getty Petroleum Marketing Inc., et al. (the “Debtors”), seeking an order pursuant to section 554 of the Bankruptcy Code authorizing and directing the Debtors to abandon whatever remaining interests the Debtors have in certain Underground Storage Tanks and Aboveground Storage Tanks (“Tanks”); and the Court having jurisdiction to consider the Motion and the relief requested therein in accordance with 28 U.S.C. §§ 157 and 1334; and due notice having been provided to the Objectors (defined below); and it appearing that no other notice of the Motion need be provided; and upon consideration of all of the pleadings filed in support of and in opposition to the Motion, and the arguments advanced by the parties in court during the August 2, 2012 hearing, the Court having determined that the relief sought in the Motion is in the best 1

As modified by the Partial Withdrawal of the Motion of the Official Committee of Unsecured Creditors for an Order Authorizing and Directing Debtors to Abandon Certain Underground and Aboveground Storage Tanks and the Reply of the Official Committee of Unsecured Creditors in Support of its Motion for an Order Authorizing and Directing Debtors to Abandon Certain Underground And Aboveground Storage Tanks. The list of tanks that are the subject of this Order are set forth in Exhibit B hereto.

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interests of the Debtors, their estates and all parties in interest; and after due deliberation and sufficient cause appearing therefore, it is hereby ORDERED that the Debtors are authorized to abandon each of the Tanks that is the subject of the Motion upon certification that they have fulfilled the conditions set forth herein (the “Abandonment Procedures”): a)

With respect to Tanks other than Tanks located at located at 13 Clarke Avenue, Staten Island, NY, the Tyree Organization, the Debtors’ environmental consultant, shall certify (by the Debtors filing such “Certification” on the Court’s docket), with respect to each Tank, that: 1. the product lines into and out of the Tank(s) at issue has been blown back or drained, so that no product remains in the piping; 2. the Tank(s) at issue has/have been emptied so that all liquid and accumulated sludge in the Tank(s) is removed, to the extent possible, and in any event the Tank(s) will be emptied and washed such that there is no more visible product in the effluent and there is less than one-half inch of residue in the Tank(s) (the “Emptying”); and 3. all fills, pumps, manways, and ancillary equipment for the Tank(s) at issue has/have been capped and secured; the vent lines of the Tank(s) are left open and functioning; the product lines for the Tank(s) at issue has/have been capped and secured at the dispensers; and the electric power to the dispensers has/have been locked-out (including the disconnect of hot wires) (the “Closing”), thereby rendering the Tank(s) inoperable; 4. in the event the Tank(s) is/are protected from corrosion by sacrificial anodes, and there is no record that the sacrificial anodes have been tested in the previous six months, the sacrificial anodes have been tested for proper functionality; i. to the extent that a Tank and/or its piping and/or lines are constructed of steel, then sacrificial anodes that have been tested and found not to be functioning properly have been replaced and, in the event the Tank(s) is/are protected from corrosion by impressed current, sacrificial anodes are installed on the (steel) Tank(s) and the (steel) piping and lines; -2-


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5. the lines, pumps, manways, and ancillary equipment are secured with a combination lock, and the combination is provided to the federal and state agencies (the “Agencies”); b)

With respect to Tanks located at 13 Clarke Avenue, Staten Island, NY, the Tyree Organization, the Debtors’ environmental consultant, shall certify (by the Debtors filing such “Certification” on the Court’s docket), with respect to each Tank, that: 1. remaining liquid from tanks and lines have been removed; and that sludge and liquids not able to be removed using the vac truck have been placed in DOT drums and properly disposed off-site and that copies of the waste manifests have been provided to New York City (Attention: Daniel Greene, Senior Counsel, New York City Law Department, Environmental Law Division, 100 Church Street, New York, NY 10007, [email protected]); 2. dispensers and fire suppression equipment have been removed and properly disposed; 3. concrete and asphalt generated by removal of the USTs and piping has been disposed; 4. after having provided the New York State Department of Environmental Conservation (Attention: Benjamin Conlon, Esq., Office of the General Counsel, NYSDEC, 625 Broadway, 14th Floor, Albany, NY 12233-1010, [email protected]) and the City of New York (Attention: Daniel Greene) three business days’ notice of the date and time of the removal of the Tanks, the two 4,000-gallon steel gasoline underground storage tanks (USTs) have been removed and disposed; 5. underground product/vent piping have been removed and disposed; 6. A minimum of four (4) samples have been collected from the excavation zone where any potential release is observed (photoionization detector, visual, olfactory) including the area of the tank bed and/or from the sides of the excavation, and analyzed per subparagraphs (c)(3) and (4), below. 7. excavations have been backfilled with clean fill; and 8. two 240-gallon “lube cube” style aboveground storage tanks (ASTs) for waste oil and fuel oil have been pumped out, cleaned, removed and properly disposed off site and that copies of the waste manifests have been provided to New York City (Attention: Daniel Greene). -3-


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The certification described in paragraph (a) above shall include a report prepared by the Debtors’ environmental consultant, the Tyree Organization (the “Tyree Report”), describing the general environmental conditions of the site, and representing that the Tank(s) themselves (which will have been Emptied and Closed) do not pose an imminent and identifiable risk of harm to the public. In developing the Tyree Report, the Tyree Organization shall: 1. submit a plan for the investigative work described below to the appropriate Agencies for review, and the Agencies shall have two business days to provide comments from receipt; the Tyree Organization will consider any comments in good faith and provide the Agencies with a response at least two business days prior to commencing the work described in this Order. 2. collect groundwater samples using appropriate methods from up to four wells that are closest to the existing tankfield and piping; 3. utilize a laboratory accredited by the National Environmental Laboratory Accreditation Program (“NELAP”) to analyze up to four groundwater samples for volatile organic compounds according to EPA Method 8260 STARS (and include such laboratory analyses in the Tyree Report); i. to the extent that a site at which Tanks are located are not undergoing active remediation or testing under the aegis of a governmental agency, then the site shall also be sampled with a geoprobe for the presence of soil contamination, and such samples shall be analyzed by a NELAP-accredited laboratory; 4. if the Tank(s) at issue stored leaded gasoline at any time, test groundwater samples for lead and lead scavengers, including ethylene bromide, and, if the Tank(s) stored methyl tertiary butyl ether (“MTBE”) at any time, test groundwater samples for MTBE; 5. provide photographs of the site(s) after the Emptying and Closing; 6. to the extent possible, conduct interviews with current operators (if any) regarding the current tank system; and 7. to the extent such information is available, inform the Agencies with respect to each site if the Tank(s) were in compliance with all applicable regulations until April 2012, including Underground Storage Tank (“UST”) regulations and Spill Prevention, Control, and Countermeasure (“SPCC”) regulations and if the Tank(s) were not in compliance, when -4-


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compliance ceased, and information concerning the nature of the noncompliance. d)

Any party that filed an objection to the Motion and which objection concerns a site at which Tanks are located that are still subject to the Motion (the “Objectors”), may file an objection (a “Certification Objection”) to the conclusions set forth in the certification (including the annexed Tyree Report, if applicable) that such Tanks do not pose an imminent and identifiable risk of harm to the public and raise any argument pursuant to Midlantic Nat’l Bank v. N.J. Dept. of Envtl. Prot., 474 U.S. 494 (1986). Such objection shall be filed before 5:00 p.m. (prevailing Eastern Time) on the fifth business day following the filing of the Certification (the “Objection Deadline”). Copies of the Certification Objection shall be served by electronic mail (with PDF attachments) to the Committee, the United States Trustee for the Southern District of New York, the United States Attorney for the Southern District of New York, and any other relevant parties, and no further service or notice of the Certification Objection need be provided. Within three business days thereafter, or as soon thereafter as is practicable, the Court shall hold an evidentiary hearing to determine whether abandonment is appropriate pursuant to Midlantic.

e)

To the extent that any landlord, operator or other party elects to take over either ownership or operation of the Tanks, in lieu of the Tanks being abandoned under the authority set out hereunder, the Committee and/or the Debtor shall ensure that such entity is apprised of the risks associated with the current non-compliant condition of the Tanks, including the potential that the entity will incur responsibilities and liabilities to investigate and/or remediate ongoing and/or past releases of regulated substances from the UST system and that such party is apprised of its obligations to comply with state and federal environmental laws and regulations, and provided a copy of this Order. The Committee and/or Debtor may satisfy its obligations under this paragraph by entering into a Disclosure and Transfer Agreement, substantially in the form appended as Exhibit A hereto (subject to any revisions, not inconsistent with the terms of this Order, as may be agreed between the Debtor and the landlord, operator, or other party). Upon making such a disclosure to a landlord, operator or other party, the Committee and/or the Debtor shall file a Notice of such disclosure on the Court’s docket. Such party must register with the appropriate state agency as the owner or operator of the Tanks by September 30, 2012. Moreover, to the extent that such party does not register with the appropriate state agency as the owner or operator of the Tanks by September 30, 2012, the Debtors shall be able and are directed to carry out the Abandonment Procedures set forth herein on those Tanks. Furthermore, to extent that such application is not approved within 90 days after -5-


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September 30, 2012, the Debtors shall additionally be able and are directed to carry out the Abandonment Procedures set forth herein on those Tanks. If state approval is granted as set forth herein and the Committee and/or the Debtor has made the disclosures required herein, then the Committee need not comply with the Abandonment Procedures for that specific tank. So long as state approval is granted within the time limits set forth herein, the transfer to the landlord, operator, or other party (which transfer is hereby authorized) shall be deemed effective as of the date of the Notice provided for under this paragraph. f)

To the extent commercially reasonable or as required by law, any Objector shall be provided the opportunity to witness and collect samples during the Emptying and Closing. The Debtors and the Committee shall, to the extent commercially reasonable or as required by law or regulation, give the Objectors advance notice of when the Emptying and Closing shall take place so that any Objector(s) may observe such Emptying and Closing; and it is further2 ORDERED that if no Certification Objection is filed prior to the Objection

Deadline, then upon the certification by the Debtors that it has satisfied the Abandonment Procedures and that no Certification Objection was filed by the Objection Deadline, the Tank(s) subject to the Certification shall be deemed abandoned, pursuant to section 554 of the Bankruptcy Code, effective as of the expiration of the Objection Deadline; and it is further ORDERED that to the extent a Certification Objection is filed prior to the Objection Deadline, the Tank(s) that are the subject of such an objection shall not be deemed abandoned pending further Order of this Court; and it is further ORDERED that the Debtors are hereby authorized and empowered to take any and all actions necessary to implement the relief granted in this Order; and it is further ORDERED that nothing herein shall be deemed to allow, deny, determine the priority of, or otherwise affect any claim or cause of action of any Objector, either under bankruptcy or nonbankruptcy law; and it is further 2

The Debtors shall certify with respect to condition (f) that it engaged in reasonable efforts to fulfill such condition.

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ORDERED that nothing in this Order shall be construed to waive any claims or causes of action any Objector may have against the Debtors or their estates, whether or not such claims or causes of action arise under or relate to the Tanks; and it is further ORDERED that nothing in this Order releases, nullifies, precludes or enjoins the enforcement of any liability to a governmental unit under police and regulatory statutes or regulations (including but not limited to environmental laws or regulations), and any associated liabilities for penalties, damages, cost recovery, or injunctive relief that any entity would be subject to as the current or former owner, lessor, lessee, or operator of property, that is abandoned pursuant to this Order; and it is further ORDERED, that the provisions contained herein reflect a non-precedential compromise of contested positions, and all parties reserve their legal arguments on any issues involved in other matters; and it is further ORDERED that this Court shall retain jurisdiction with respect to any matters, claims, rights or disputes arising from or related to the implementation of this Order.

Dated: August 15, 2012 New York, New York

/s/ Shelley C. Chapman HONORABLE SHELLEY C. CHAPMAN UNITED STATES BANKRUPTCY JUDGE


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EXHIBIT A [FORM OF] DISCLOSURE AND TRANSFER AGREEMENT In accordance with the terms of the ORDER AUTHORIZING AND DIRECTING DEBTORS TO ABANDON CERTAIN UNDERGROUND AND ABOVEGROUND STORAGE TANKS UPON CERTIFICATION OF FULFILLMENT OF ABANDONMENT CONDITIONS (the “Abandonment Order”), entered by the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) in the bankruptcy case of In re: Getty Petroleum Marketing, Inc., Case No. 11-15606 (SCC) [Docket # ___], this Disclosure and Transfer Agreement is entered into between Getty Petroleum Marketing, Inc. (including any Liquidating Trust that may acquire any GPMI assets under a confirmed plan of reorganization) (“GPMI”) and ______________ (“Landlord/Operator”). 1. To the extent authorized by the Court in the Abandonment Order and any further Orders, GPMI is authorized to abandon any petroleum storage tanks that it owns, located at __________________________ (the “Tanks”). 2. Landlord/Operator seeks to take title to the Tanks, rather than have GPMI abandon the Tanks in accordance with the terms of the Abandonment Order, a copy of which has been provided to Landlord/Operator. 3. GPMI hereby discloses to Landlord/Operator that the Tanks are and/or may not be presently in compliance with applicable environmental laws. Landlord/Operator may incur responsibilities and liabilities to investigate and/or remediate ongoing and/or past releases of regulated substances from the Tanks. Landlord/Operator is obligated to comply with state and federal environmental laws and regulations. As a bilateral agreement between GPMI and Landlord/Operator, nothing in this Disclosure and Transfer Agreement releases, nullifies, precludes or enjoins the enforcement of any liability to a governmental unit under police and regulatory statutes or regulations (including but not limited to environmental laws or regulations), and any associated liabilities for penalties, damages, cost recovery, or injunctive relief that any entity would be subject to as the current or former owner, lessor, lessee, or operator of property, that is sold, leased, licensed, or otherwise disposed of pursuant to this Disclosure and Transfer Agreement. As a bilateral agreement between GPMI and Landlord/Operator, nothing contained in this Disclosure and Transfer Agreement shall in any way diminish the obligation of any entity, including the Debtors or the Landlord/Operator, to comply with environmental laws. 4. Subject to the terms and conditions hereof and applicable non-bankruptcy law, Landlord/Operator shall take title to the Tanks, provided that transfer of title to the Tanks shall be contingent upon and become effective on the date that the Landlord/Operator complies with ACTIVEUS 98957089v11

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all applicable legal requirements under non-bankruptcy law governing such transfers and the State approves the application of the Landlord/Operator. 5. To the extent that GPMI incurs any liability arising out of its ownership of the Tanks, beginning as of the date of this Agreement, which liability would have been avoided had GPMI abandoned the Tanks under the Terms of the Abandonment Order effective as of the date of this Agreement, Landlord/Operator shall indemnify GPMI and hold GPMI harmless with respect to any such liability. 6. Landlord/Operator hereby submits to the jurisdiction of the Bankruptcy Court with respect to any dispute arising under or related to this Agreement, including the Bankruptcy Court’s authority to enter a final order in respect of any such dispute.

DATE: _________________________ [Signature of GPMI or Liquidating Trust]

[Signature of Landlord/Operator]


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EXHIBIT B TANKS SUBJECT TO ABANDONMENT PROCEDURES

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NUMBER

SITE LOCATION NO.

STREET ADDRESS

CITY

STATE

ZIP

TANK #

FACILITY REGISTRATION NO.

UST/AST

TANK SIZE (gallons)

TANK MATL

PRODUCT STORED

1

200

13 CLARKE AVENUE

STATEN ISLAND

NY

10306

00001

2‐260037

U

4000

ST (anode)

Gasoline/Ethanol

2

200

13 CLARKE AVENUE

STATEN ISLAND

NY

10306

00002

2‐260037

U

4000

ST (anode)

Gasoline/Ethanol

3

200

13 CLARKE AVENUE

STATEN ISLAND

NY

10306

2‐260037

A

240

ST

#2 Fuel Oil

4

200

13 CLARKE AVENUE

STATEN ISLAND

NY

10306

2‐260037

A

240

ST

Waste Oil/Used Oil

5

56290

2466 SOUTH BROAD STREET

TRENTON

NJ

08610

00 E‐1

04908

U

8000

FG

Unleaded gasoline

6

56290


TRENTON

NJ

08610

00 E‐2

04908

U

8000

FG

Unleaded gasoline

7

56290


TRENTON

NJ

08610

00 E‐3

04908

U

8000

FG

Medium diesel fuel (#2‐D)

8

56295

27 ROUTE 46 E

PINE BROOK

NJ

07058

1

93164

U

10000

FG

Unleaded gasoline

9

56295

27 ROUTE 46 E

PINE BROOK

NJ

07058

2

93164

U

12000

FG

Unleaded gasoline

10

56821

252 IRVINGTON AVE

SOUTH ORANGE

NJ

07079

E‐1

01490

U

8000

FG

Unleaded gasoline

11

56821

252 IRVINGTON AVE

SOUTH ORANGE

NJ

07079

E‐2

01490

U

8000

FG

Unleaded gasoline

12

56871

450 NEW YORK AVE

JERSEY CITY

NJ

07087

E‐01

01469

U

6000

FG

Unleaded gasoline

13

56871

450 NEW YORK AVE

JERSEY CITY

NJ

07087

E‐02

01469

U

6000

FG

Unleaded gasoline

14

56871

450 NEW YORK AVE

JERSEY CITY

NJ

07087

E‐03

01469

U

6000

FG

Unleaded gasoline

15

56872

39 CENTRAL AVE.

JERSEY CITY

NJ

07087

E1

01468

U

6000

FG

Unleaded gasoline

16

56872

39 CENTRAL AVE.

JERSEY CITY

NJ

07087

E2

01469

U

6000

FG

Unleaded gasoline

17

56872

39 CENTRAL AVE.

JERSEY CITY

NJ

07087

E3

01469

U

6000

FG

Unleaded gasoline

18

58812

213 MAIN ST. (JCT. ROUTE 9W & ROUTE 143)

RAVENA

NY

12143

1

4‐066028

U

10000

STIP (ANODE) GASOLINE

19

58812


RAVENA

NY

12143

2

4‐066028

U

8000

STIP

GASOLINE

20

58812


RAVENA

NY

12143

3

4‐066028

U

6000

STIP

GASOLINE

21

69688

45 E. HANOVER ST

BONNEAUVILLE

PA

17325

579057‐004

561022

U

10000

FG

GASOLINE

22

69688

45 E. HANOVER ST

BONNEAUVILLE

PA

17325

579057‐005

561022

U

12000

FG

GASOLINE