ITEM 1.01. Entry into a Material Definitive Agreement.
On April 16, 2021, the U.S. Department of Justice and the U.S. Environmental
Protection Agency, on behalf of various federal agencies of the United States of
America, executed a Consent Decree with Kaanapali Land, LLC, a Delaware limited
liability company (the "Company") that, if entered by the U.S. District Court
sitting in the District of Hawaii, United States of America v. Kaanapali Land,
and Oahu Sugar Company, LLC Case No. 1:21-CV-00190, would resolve the U.S.
federal government's current environmental claims against the Company with
respect to contamination at the former mixing site on Waipio Peninsula on Oahu
in Hawaii that had been leased by Oahu Sugar Company LLC, a former subsidiary of
the Company. In return for payments by the Company totaling $7.5 million, the
Consent Decree would resolve liability asserted by the U.S. government against
the Company under the Comprehensive Environmental Response Compensation and
Liability Act (CERCLA) as well as under the Clean Water Act, both for response
costs (those costs expended for investigation and cleanup) and for natural
resource damages.
The Company has been in discussions with Fireman's Fund, the insurance carrier
with which the Company and certain of its subsidiaries maintained liability
policies, regarding the payment or reimbursement by Fireman's Fund of a
significant portion of the settlement amount to be paid by the Company under the
Consent Decree. The Company can give no assurances as to what portion, if any,
of the settlement payment will be recovered from Firemen's Fund.
The Consent Decree is subject to a number of contingencies that could prevent it
from being finalized with its current terms. In particular, and without
limitation, (i) the Consent Decree has been lodged with the District Court for a
period of at least 30 days for public notice and comment, and the United States
has reserved the right to withdraw or withhold its consent if the comments
regarding the Consent Decree disclose facts or considerations that indicate the
Consent Decree is inappropriate, improper or inadequate, (ii) the Company may
oppose entry of the Consent Decree as the result of any objection in other
pending proceedings to use by the Company of site-related insurance proceeds
from Fireman's Fund; and (iii) the District Court in Hawaii might determine not
to enter the Consent Decree as currently written or as approved by the federal
government. There can be no assurance that the contingencies will not preclude
entry of the Consent Decree.
The foregoing description of the Consent Decree and the matters contemplated
thereby in this Current Report on Form 8-K is only a summary and is qualified in
its entirety by reference to the complete Consent Decree, a copy of which is
filed as Exhibit 10.1 and incorporated by reference herein.
ITEM 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1 Consent Decree entered into as of April 16, 2021, for the
United States of America by U.S. Department of Justice and
U.S. Environmental Protection Agency and by Kaanapali Land,
LLC and Oahu Sugar Company, LLC.
2
© Edgar Online, source Glimpses