Exide Succeeds Before Bankruptcy Court, Which Finds Non-Compensatory Environmental Penalties Dischargeable, Non-Priority

On April 30, a federal bankruptcy judge issued an opinion on three motions in a dispute between Skadden client Exide and the South Coast Air Quality Management District (SCAQMD), siding with Exide on all three matters related to more than $80 million in civil penalties and administrative expense claims against Exide for lead and arsenic emissions into the air around Exide’s now-closed Vernon, California, lead battery recycling facility. Specifically, the opinion and a related order sustain the debtor’s objection to administrative claims filed by the SCAQMD, deny the SCAQMD’s motion to deem certain of its late-filed claims timely and deny a motion by the SCAQMD seeking a finding that certain claims were non-dischargeable.