Tonawanda Coke files for Chapter 11 bankruptcy

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Tonawanda Coke has filed for bankruptcy citing more than $2 million in debts and that it has property that poses a threat of imminent hazard to public health and safety.

The Chapter 11 bankruptcy filing does not provide specifics as to the hazard, but environmental regulators have concerns about a moat filled with contaminated water on the property and an explosion risk while the company continues to shut down its ovens.

The company listed estimated assets of between $10 million and $50 million, with liabilities in the same range.

WIVB reported first on Friday that the company is shutting down operations. The shutdown of its battery ovens is ended Monday, with a full closure within two weeks. At least 129 employees will lose their jobs by the end of this month. State officials said they have Labor Department employees on site to help workers find new jobs.

In addition, environmental regulators said they are on site to ensure a safe closure of the facility.

A lot of local businesses are owed money, according to the bankruptcy filing. 

MORE | Read the bankruptcy filing here.

Local companies owed money include Dival Safety Equipment in Buffalo; National Maintenance Contracting Corp in Niagara Falls; Klein Steel Service in Buffalo; Corfu Machine Co Inc in Corfu; Chiampou Travis Besaw and Kerschner LLP in Amherst; Bright Systems Inc in North Tonawanda; Guardian Environmental Associates in Tonawanda; Global Environmental in Dunkirk; Doritex Corp in Alden; and Advanced Manufacturing and Mechanical Inc. in Blasdell.

The filing states that these companies and dozens of others are unlikely to see any of the owed money after Tonawanda Coke pays its administrative expenses. In fact, more than 250 pages of the filing includes names of companies potentially owed money.

Tonawanda Coke has a long history of environmental and worker safety violations, along with run-ins with state and federal regulators.

In 2014, a judge ordered the company to pay $25 million in fines and community service payments, after being found guilty of a host of environmental laws. At sentencing, the company agreed not to break any local, state or environmental laws and was placed on a five-year probation, while the former environmental control manager was sentenced to jail.  

In September, U.S. District Judge William Skretny found Tonawanda Coke guilty of violating its probation by breaking environmental laws associated with its heat stack emissions. He extended the probationary period and ordered the company to test the chemicals emitting from its heat stick, hire a third-party monitor to fix the problems at the plant and ensure it stays in compliance with environmental laws.

At the same time, the state Department of Environmental Conservation ordered the company to cease and desist operations of its battery until the company fixed the heat stack problems.

Tonawanda Coke was already under financial strain. Company attorneys noted in court filings that it was borrowing millions of dollars from Honeywell to pay its community service payments.

On Friday, attorneys revealed that the company was shutting down. Tonawanda Coke wanted to keep the shut down secret from the public and its employees, but Judge Skretny refused the request by allowing a WIVB reporter to remain in the courtroom.   

With the bankruptcy in motion, the chief concerns local activists and politicians have is whether Tonawanda Coke will be able to pay its final community service payment of $2 million that funds health studies and whether it will be held responsible for the environmental cleanup of its property off River Road in the Town of Tonawanda.

On Tuesday, Judge Skretny refused to give Tonawanda Coke more time to pay the community service payment. But he did extend by one week the deadline for the company to file its financial records with federal prosecutors, to Oct. 24. 

Members of the Clean Air Coalition of WNY, a local environmental nonprofit, called on state and federal authorities to hold Tonawanda Coke CEO Paul Saffrin accountable for the cleanup and employee pensions.

“Due to the long history of egregious violations by this company, and the statement from Tonawanda Coke about the hazards present on their site, Clean Air is calling for Paul Saffrin and Tonawanda Coke Trustees to be personally liable in the case that the company cannot pay pensions, and retirement benefits,” Clean Air Coalition Executive Director Rebecca Newberry said in a statement.

“In addition, Clean Air calls for Tonawanda Coke leadership to be held accountable to cover the costs of medical monitoring of workers, and cover the cost of remediation of their site.”

U.S. Sen. Chuck Schumer told WIVB this week that authorities must make sure that Tonawanda Coke pays the final community service payment. That money funds soil testing and public health testing for residents who live near the plant.

“I’ll make sure that no one walks away with a lot of money before these victims are paid, plain and simple,” he said.

On Friday, Judge Skretny ordered Tonawanda Coke to pay the fee immediately and turn over its financial information to federal prosecutors by Friday. But company attorneys said then that they have not been successful finding a loan.

“We made a submission last Friday night which explained why we couldn’t and we still continue to make efforts to try to obtain the monies to make it but as of right now I have to go back and talk to my client but we’ve got to look into it more but I don’t think our positions changed from what we filed with the court last Friday or what I said today,” said Jeffrey Stravino, an attorney for Tonawanda Coke, on Friday.  

Officials with Tonawanda Coke did not immediately respond to a request for comment. 

Meanwhile, state Department of Environmental Conservation officials stated that it continues “rigorous monitoring” at the facility after the the shut down of the coke battery and some 30 ovens. 

“With the shutdown of the last 30 coke ovens at Tonawanda Coke, we are moving this community one step closer to being free of this facility’s billowing smokestacks,” DEC Commissioner Basil Seggos said in a prepared statement.

“DEC will continue to oversee operations until the job is complete, monitoring every step of the shutdown of Tonawanda Coke, and advancing the cleanup of any contamination this facility leaves behind.”    

The DEC said the next steps include purging the gas lines and cooling the battery ovens, which will continue through this week.

Clarification: An earlier version of this story stated that Dival Safety Equipment was owed a higher amount of money based on the bankruptcy filing. An employee for the company said there is an error in the bankruptcy filing and that they are owed much less than what is listed. 

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