Seized California Insurer Golden Eagle to Pay for Landfill Cleanup

August 28, 2009

The Golden Eagle Insurance Co. will pay $400,000 to cover environmental investigation costs that the insolvent BKK Corp. was required to perform at its closed hazardous waste landfill in West Covina, Calif., the U.S. Environmental Protection Agency and the U.S. Department of Justice said.

Government officials said they were “aggressive” in pursuing Golden Eagle so as to limit the use of taxpayer funds for the cleanup.

The BKK Landfill facility is in the heart of West Covina – a city in Southern California with a population of over 100,000 residents. BKK consists of a closed hazardous waste landfill where hazardous waste and municipal solid wastes were disposed of between 1972 and 1987, and an adjacent inactive municipal solid waste landfill which operated from 1987 to 1996.

Golden Eagle Insurance has been undergoing conservation, rehabilitation and liquidation since its January 1997 seizure by the California Insurance Commissioner. But when BKK notified EPA and the State of California in 2004 that it could no longer afford to do the work required at its closed 583-acre landfill site in southern California, EPA submitted a claim to the insurer under a 1989 performance bond that Golden Eagle had issued to BKK.

The California Department of Toxic Substances Control has stepped in to continue critical operations at the landfill, using a combination of government funds and payments under settlements with those who generated waste that was disposed in the landfill when it was still operating.

The performance bond guaranteed environmental investigations that were required of BKK under an Enforcement Order that EPA entered into with the landfill owner in 1989. When Golden Eagle denied EPA’s claim under the bond, EPA asked the Justice Department to pursue the claim against the insurer and the United States appeared in the California State Superior Court for San Francisco County, which oversees Golden Eagle’s reorganization. After two years of litigation and negotiation, the parties reached the $400,000 settlement of the United States’ claim.

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