More than 35,000 people from this area and other parts of the country are still awaiting resolution of their compensation claims for medical problems blamed on Kerr-McGee Corp. sites, including a creosote wood-treatment plant that had operated in Avoca for four decades, new court filings show.
And as they wait, the pot set aside to pay approved claims continues to shrink.
Management, processing and legal costs ate up $3.37 million in 2017, leaving approximately $22.25 million in this tort fund for disbursement at the end of the year, according to an audit filed with the New York City bankruptcy court on April 30.
Part of a $5.1 billion bankruptcy settlement involving Kerr-McGee and related entities, the fund was carved out for those not among the approximately 6,000 Avoca area residents who already received payments in past litigation or bankruptcy claims.
Cancer, respiratory problems, heart conditions, rashes and other medical maladies have been blamed on carcinogens and chemicals used at the Kerr-McGee plant on Mill Street in Avoca, which closed in 1996, filings have said.
Ohio-based Garretson Resolution Group, which oversees the fund, has approved 6,243 of the 35,048 in outstanding claims to date and rejected 11,079.
More than 4,300 of those rejected have filed motions with the bankruptcy court seeking reconsideration, the audit said.
Garretson filed a court action April 25 asking the bankruptcy judge to deny all of these motions, records show.
At least 265 of these denial challenges were filed by Pennsylvania residents, a review of Garretson’s filing showed. Many were from Mississippi.
Garretston’s filing says the 4,300 claims all involved hazardous-exposure injuries that appeared before Aug. 12, 2009, which was the court-established deadline for bankruptcy settlement participants.
In this situation, claimants must convince a judge their failure to file a timely claim should be excused on grounds of “excusable neglect” or insufficient due process.
Due process was honored, Garretson argued, because the 2009 deadline notification was court-approved and printed in the Wall Street Journal and 35 local newspapers in the area of Kerr-McGee sites.
None of the motions met case law standards for establishing excusable neglect, Garretson maintained.
In addition, 299 filers provided no reason for missing the deadline, and another 289 submitted forms with missing information, Garretson said.
Some other reasons cited as insufficient by Garretson: 233 blamed attorneys for failing to file their claims; 79 said someone told them they could not file a claim; and 10 forgot to file.
“Their broad statements of excuse do not carry their high burden of proving that their neglect to file was excusable,” Garretson said.
Granting late claims will “open a floodgate” of additional filings and “diminish to immateriality” the amounts that can be paid to those who were unable to seek compensation because their injuries surfaced after 2009, the filing said. The tort fund also must cover another 880 separate claims involving asbestos, it said.
James Haddock, a spokesperson and activist on the Avoca issue, has repeatedly said he worries continued delays will cause more of the fund to be sucked up by processing and administrative fees, leaving little or nothing for claimants.
The entity known today as the “new” Kerr-McGee Corp. in court records did not come into existence until 2001 and can’t be held liable for the past negligence and injury alleged by the Avoca claimants, the company’s lawyers have successfully argued in court when some of the plaintiffs tried to seek additional compensation.
Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.