## Facts

- Solitron Devices, Inc. operated an electronics manufacturing facility in Tappan, New York (1961–1987) that may have contributed to contamination at a Clarkstown, New York landfill.
- Before Solitron filed bankruptcy, New York’s environmental agency had identified the landfill as contaminated and had information tying Solitron to the site.
- Solitron filed a Chapter 11 case in 1992; the bankruptcy court established notice procedures for environmental-contamination claimants.
- Solitron provided the environmental agency notice identifying Solitron’s facility as a potential source of an environmental claim; the agency did not file a proof of claim.
- The court confirmed Solitron’s Chapter 11 plan in 1993, and the case was closed after substantial consummation.
- In 2002, the environmental agency issued notices of potential liability to potentially responsible parties, including Solitron.
- Other potentially responsible parties formed a joint defense group, settled with the agency for cleanup costs, and in 2013 sued Solitron in federal district court for CERCLA contribution.
- Solitron moved to reopen the bankruptcy case to enforce the confirmation order and discharge, and to stop the contribution suit.

## Issues

1. Whether the environmental agency held a prepetition “claim” under the Bankruptcy Code for cleanup costs such that it was discharged by the confirmed Chapter 11 plan when the agency did not file a proof of claim.
2. Whether settling potentially responsible parties could maintain a CERCLA contribution claim against Solitron based on “common liability” to the environmental agency after Solitron’s discharge.
3. Whether the bankruptcy court should enjoin the pending federal district court contribution action as violating the confirmation order or discharge injunction.

## Decision

- The court reopened the Chapter 11 case to interpret and enforce the confirmation order and to determine discharge-related effects.
- The court held the environmental agency had a contingent, unliquidated prepetition claim based on known contamination and known potential responsibility; the claim was discharged upon plan confirmation because the agency had notice and did not file a proof of claim.
- The court concluded the joint defense group lacked a viable CERCLA contribution theory premised on shared liability to the agency because the discharge eliminated the agency’s enforceable claim against Solitron, defeating “common liability.”
- The court declined to enjoin the federal contribution action, reasoning that filing the suit did not itself establish a violation of the confirmation order and that the district court was the proper forum to address the effect of the discharge on the pending CERCLA litigation.

## Legal Principles

- “Claim” under the Bankruptcy Code is construed broadly to include contingent and unliquidated rights to payment, including environmental cleanup liabilities, when there is sufficient prepetition knowledge connecting the debtor to the contamination.
- A creditor with actual notice of a Chapter 11 case and bar date that fails to file a proof of claim risks discharge of its prepetition rights to payment upon plan confirmation.
- CERCLA contribution under § 113(f) depends on a form of shared or common liability to a third party; when a debtor’s liability to that third party is discharged, contribution premised solely on that common liability may fail.
- Post-confirmation bankruptcy jurisdiction permits interpretation and enforcement of the confirmation order and discharge, but does not automatically justify enjoining separate federal litigation; the court may leave application of discharge defenses to the court where the action is pending.

## Conclusion

The bankruptcy court treated the state agency’s cleanup rights as a dischargeable prepetition claim due to prepetition knowledge and notice, concluded the discharge defeated a later CERCLA contribution theory dependent on common liability, and nevertheless declined to enjoin the pending district court action.


In re Solitron Devices, Inc., 510 B.R. 890 (Bankr. S.D. Fla. 2014)