YOUNGSTOWN - A federal judge will hear arguments this morning on whether bankrupt D&L Energy may pay an environmental company $113,000 to file a report due Monday with the U.S. EPA on cleanup of oilfield waste dumped into the Mahoning River watershed.
If the report is not filed by Monday, attorneys for D&L Energy say the U.S. EPA likely will begin charging D&L Energy penalties of up to $37,500 per day.
"These financial penalties, particularly at this early stage of the case, will disrupt the debtors' ongoing business operations and jeopardize their chances for a successful reorganization," D&L Energy attorneys wrote in a court filing Thursday.
After D&L Energy's majority owner Benedict Lupo, 62, of Poland, was charged with a violation of the federal Clean Water Act, the U.S. Environmental Protection Agency ordered D&L to clean up the oilfield waste and submit a final report detailing the cleanup records.
Prior to this week's bankruptcy filing, D&L had hired EnviroScience to oversee the work and complete the report. However, because D&L said it does not have the money to pay the bill, EnviroScience has not completed the report.
A payment plan has been drawn up, but must be approved by U.S. Bankruptcy Court Judge Kay Woods in order to proceed.
D&L and subsidiary PetroFlow on Tuesday filed for Chapter 11 bankruptcy protection claiming extensive cleanup costs and other financial burdens triggered the claim after Lupo was accused of ordering an employee of a sister company to illegally dump brine and oilfield waste.
Lupo resigned as a D&L officer, but still owns more than 80 percent of the company's stock. He has pleaded innocent to the federal criminal charge.