ILLINOIS POLLUTION CONTROL BOARD

October 3, 1972

ENVIRONMENTAL PROTECTION AGENCY,

Complainant,

v.

)

PCB 71—347

DARRILL INDUSTRIES, INC.,

Respondent.

Lee Campbell, Assistant Attorney General for the EPA

Richard Johnson, Attorney for Respondent

OPINION

AND

ORDER OF THE BOARD (by Mr. Henss)

The Environmental Protection Agency filed a complaint against

Darrill Industries, Inc., owner and operator of a soap factory in

Chicago, alleging that Respondent had allowed the emission of

odors, particulates and gases and had failed to file an Air

Contaminant Emission Reduction Program with the Agency in violation

of the Environmental Protection Act. Respondent filed its

“Proposal” denying the charges and proposing that no fine be

levied. The Corporation further alleged that it had ceased the

spray drying of detergents on December 23, 1971, 50 days after

the EPA filed its complaint; that the alleged sources of pollution

were no longer in operation; that the Company would not resume the

spray drying operation without approval of the Environmental

Protection Agency and that the Corporation was not in financial

position to pay a significant fine.

Hearing was postponed so that the EPA could study the proposal.

Subsequently the attorneys for the parties appeared before a

Hearing Officer and submitted a document designated “Stipulation

and Proposal for Settlement”, No evidence was presented beyond

the brief statements contained in the settlement proposal.

The parties stipulated that the following facts are true:

That the business of Respondent Darrill Industries Inc. has in-

cluded the spray drying of detergents at its factory in Chicago

“which spray drying operation resulted in the emissions allegedly

constituting air pollution”; that all spray drying ceased on

December 23, 1971, and on February 29, 1972 the Corporation ceased

general business operations completely (other than marketing) in

the State of Illinois; that the plant has not been used since

February 29, 1972 and has been placed on the real estate market

for sale. The Stipulation does not do an adequate job of sub-

mitting the facts regarding the alleged violations of law. The

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only reference to the violations is found in paragraphs 4 and

5 of the Stipulation, stating:

“4. That if there were a hearing, the Environmental

Protection Agency would introduce evidence that

the Corporation did emit odors and particulates

on certain specific dates between July 1, 1970

and December 22, 1971, to wit: October 14, 1971,

November 10, 1971 and November 16, 1971 and

certain people from the surrounding community

would testify that this unreasonably interfered

with the enjoyment of their lives.

5. That if there were a hearing, the Environmental

Protection Agency would show that the Corporation

failed to file an ACERP with either the Technical

Secretary of the Air Pollution Control Board or

with the Environmental Protection Agency.”

Respondent does not concede that there was a violation of law

and no facts are given from which we could conclude that there

was a violation, The fact that the Agency has evidence of the

emission of odors and particulates on three specific dates falls

far short of proving a violation of law, There is no evidence

whatsoever of the type and amount of the odors and particulates

which were emitted. The additional claim that certain people

“would testify that this unreasonably interfered with the en-

joyment of their lives” is a conclusion not supported by any

detailed evidence and gives us little information about the

dimensions of the emission problem. The record is entirely

inadequate with regard to proof of emissions in violation of

law or the need for filing an Air Contaminant Emission Reduction

Program.

The parties seeni to have concentrated on showing the Respondent

could not afford to pay a penalty~ Exhibits attached to the

Stipulation show that current liabilities of $1,320,641 exceed

current assets by $969,660. Cash of $10,649 and Accounts Re-

ceivable for $94,097 are far less than Accounts Payable which

total $874,466. Even the sale of the plant property and equip-

ment valued at $337,367 will not permit full payment of current

liabilities. The balance sheet shows stockholder~s equity at a

negative $693,404 which indicate~ the serious plight of this

company~screditors. The Company lost $239,046 in 1970 and lost

$321,029 from operations in 1971. In 1971 there was a write down

in the value of inventories, write down of fixed assets and

write off of deferred charges which increased the loss by

another $474,472 and indicated possible accounting problems in

the management of the Company. The loss in the first 6 months

of 1972 was $70,101 largely from the cost of discontinuing operations.

The Coreoration

has entered into an agreement with a committee of

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its unsecured creditors to grant a second mortgage on the

real estate and a security interest in all fixtures, mac~~.inery,

equipment, inventory and accounts receivable and to liquidate

all of its assets at the Chicago location.

Apparently the imposition of a penalty in this case would

do more harm to the creditors than to the Respondent which is

already in such desperate financial condition that it can no

longer operate.

The record is not adequate for us to conclude that Respondent

has allowed excessive emissions from its plant. Under other

circumstances we would return the case to the Hearing Officer

for a more explicit stipulation on the facts of the alleged

violation or a hearing on the merits. In this case, however, we

believe that the purpose of the Environmental Protection Act does

not require further proceedings. Respondent is an insolvent

corporation which clearly is not polluting the atmosphere at this

time and will probably not resume operations. It is not necessary

to enter a financial penalty or cease and desist order. Although

it seems unlikely that the Corporation will resume business we

will order Respondent to obtain a permit from the Environmental

Protection Agency prior to spraycirying detergents

in the future.

With this order we believe the public is protected.

ORDER

It is ordered that:

1. This matter be closed without penalty and without

further proceedings.

2. That Respondent obtain a

permit

from the

Environmental

Protection Agency prior to spray drying detergents

at any time in the future.

I, Chnistan L. Noffett, Cler’. of

the

Illinois Pollution Control

Board, hereby certify the above Opinion and Order was adopted

this

day of October, 1972 by a vote of

_______________

/

.—.

Christan L. Moffett, CXerk

Illinois Pollution Control Board

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