In re Solitron Devices, Inc.

From 1961 to 1987, Solitron Devices, Inc. (Solitron) (debtor) operated a manufacturing facility in Tappan, New York. Solitron’s facility might have polluted a nearby landfill. In 1992, Solitron filed a chapter 11 bankruptcy petition. The bankruptcy court established a notice procedure under which creditors who had environmental-contamination claims against Solitron could file proofs of claim in the bankruptcy proceeding. Solitron sent a bankruptcy notice to the New York State Department of Environmental Conservation (NYSDEC), identifying Solitron’s facility as a possible source of an environmental claim. However, the NYSDEC did not file a proof of claim, even though the NYSDEC had previously identified the landfill as a polluted site and had information conclusively linking Solitron to the landfill. The bankruptcy court confirmed Solitron’s chapter 11 plan in 1993. In 2002, the NYSDEC sent notices of potential liability to Solitron and other potential responsible parties (PRPs) who allegedly contributed to contaminating the landfill. A group of PRPs that did not include Solitron formed a joint defense group (JDG) to defend against the NYSDEC’s claims. The JDG subsequently settled with the NYSDEC and sued Solitron for contribution. Solitron moved to reopen its bankruptcy case, seeking to enjoin the JDG from pursuing the contribution claim. Solitron argued that the NYSDEC’s landfill-contamination claim against Solitron was a prepetition claim that had been discharged in the chapter 11 proceeding. The bankruptcy court considered the matter and issued a decision.