Ninth Avenue Remedial Group v. Allis-Chalmers Corp.

During the 1970s, the site of a disposal facility for chemical and industrial waste was contaminated by hazardous materials. Ninth Avenue Remedial Group (the Group) (plaintiff) performed the environmental-cleanup work at the site at a cost of over $20 million. In 1987, Apex Oil Company (Apex) and its subsidiary, Clark Oil & Refining Corporation (Old Clark), filed for Chapter 11 bankruptcy. During the Chapter 11 bankruptcy process, Clark Refining & Marketing, Inc. (Clark) (defendant) agreed to buy assets of Apex and Old Clark pursuant to an asset-purchase agreement, which specifically provided that Clark would not assume liabilities arising from Old Clark’s prior operations. In 1988, the bankruptcy court approved the transaction free and clear of all liens, claims, encumbrances, and obligations and extinguished all prior liens and interests on the assets. The Group sued Clark, as a successor to Old Clark, for contribution to the cleanup costs at the off-site waste-disposal facility under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The Group alleged that Clark was a mere continuity of Old Clark and that Old Clark and Apex had disposed of hazardous waste at the site. Clark filed motions to dismiss and for summary judgment alleging that, pursuant to the bankruptcy court’s approval, Clark had purchased Old Clark’s assets free and clear of all claims, including the CERCLA claim of the Group.