Flexsteel reaches $9.8 million cash settlement involving Indiana Superfund Site

DUBUQUE, Iowa — Flexsteel Inds. revealed it has reached a $9.8 million cash settlement with the U.S. Environmental Protection Agency regarding a Superfund Site in Elkhart, Indiana.

In a recent filing with the U.S. Securities and Exchange Commission, the company said while it disputes liability in the matter involving the Lane Street Groundwater Contamination Superfund Site, the settlement resolves its alleged liability for the contamination, including the EPA’s past and future remediation costs.

The filing issued Oct. 27 said that a Consent Decree memorializing the company’s settlement “achieves finality for the company in a long-running dispute with the EPA” regarding the source of the Lane Street contamination. The filing said the Consent Decree is subject to court approval.

The matter related to its 1997 purchase of assets of Dygert Seating Inc. to support the company’s former recreational seating division in Elkhart. In the years after Flexsteel closed the operation, officials discovered groundwater contamination in a neighborhood to the south of the industrial park where the division was located. The filing said the EPA began pursuing Flexsteel for cleanup of the contamination in 2016.

Flexsteel also said in the filing that its independent environmental investigation determined that the source of the contamination was at another property where Flexsteel did not operate. The company said this supports its position that it did not cause or contribute to the contamination.

However, it also said that “entering into this agreement, and foreclosing on the liabilities associated with the EPA’s claims,” is in the company’s best interest. It added that net of expected insurance proceeds, it does not expect its “uncovered contribution in the settlement to exceed the liability previously recognized related to this matter.”

According to a release by the U.S. Department of Justice, the Lane Street site includes about 65 acres of residential and light industrial properties in Elkhart. They were impacted by a groundwater plume contaminated primarily with solvents and degreasers such as trichloroethene and tetrachloroethene. The EPA chose a remedy for treating this groundwater plume by breaking down the contamination into harmless compounds.

“This settlement ensures that the responsible party and not the taxpayers fund the cleanup of the Lane Street Groundwater Contamination Superfund Site,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “The cleanup funded by this agreement protects the environment and the health of the surrounding community.”

Other officials also praised the settlement.

“This is an excellent settlement that funds necessary cleanup of a contaminated groundwater plume in Elkhart, Indiana,” said U.S. Attorney Clifford Johnson for the Northern District of Indiana. “This cleanup will protect the drinking water and health of Elkhart residents.”

“Groundwater is a drinking water source for wells and public water systems and it also flows to aboveground rivers and streams,” said EPA Regional Administrator Debra Shore. “Through this settlement and others like it, EPA is taking action to protect the health of communities and the environment by holding polluters accountable for groundwater contamination.”

Thomas Russell

Home News Now Editor-in-Chief Thomas Russell has covered the furniture industry for 25 years at various daily and weekly consumer and trade publications. He can be reached at tom@homenewsnow.com and at 336-508-4616.

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