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HomeMy WebLinkAbout2011-04-25 11-137 ORDERItem fl . 11 1:37 Date: ADII 25 2011 Item/Subject: Order, Authorizing the Execution of a Settlement Agreement with Citizens Communications Company, now known as Frontier Communications Corporation, and a Third Party Defendant Responsible Department: Legal In November 2002, the City of Bangor fled suit against Citizens Communications Company (Citizens) in the United States District Court for the District of Maine alleging that Citizens contributed to pollution of the Penobscot River. In February 2007, the City Council approved a settlement agreement with Citizens. The settlement agreement provided that the City assign any rights It has against third party defendants in the lawsuit to Citizens and that Citizens could continue to pursue its claims against them. This Order will authorize the execution of a settlement agreement with Citizens Communications Company, now known as Frontier Communications Corporation, and third party defendants Maine Central Railroad and Pan Am Railways, Inc. and a Side Agreement with Frontier Communications Corporation to make dear that Frontier's costs attributed to its pursuit of the Railroad will not be considered in the final calculation of the amount due the City from Third Party Defendant payments. Department Head Managees comments: Clry Ma Associated Information: Omer, Agreement Budget Approval FnanceDiMohr Legal Approval ily Soliciror Introduced for x Passage _ First Reading Page _ &_ Referral � . p, Assigned 0 Councilor _ p.) , CITY OF BANGOR April 25, 2011 (IME.) ORDER, Authorizing the Execution of a Settlement Agreement with Citizens communications Company, now known as Frontier Communicators Corporation, and Third Party Defendants WHEREAS, in November 2002, the City of Bangor filed suit against Closers Communications Company in the United States District Court for the District of Maine (styled City of Bangor, Maine v. Citizens Communications Company, at al., Civil Action 02-183-8- S) alleging that Citizens contrbuted W pollution of the Penobscot River; and WHEREAS, in February 2007, the Guy Council of the City of Bangor approved a settlement agreement with Citizens Communications Company, and WHEREAS, the settlement agreement provided that Me City W Bangor assign any rights It has against Third Party Defendants in Me lawsuit to Citizens and net C oms could continue to pursue it claims against them; and WHEREAS, the settlement agreement provided Mat any recovery from Third Party Defendants shall, after reimbursement of Citbe& expenses to reach a settlement, be divided two-thirds to Citizens and one-third to Me City of Bangor, and WHEREAS, Citizens Communications Company, now known as Frontier Communications Corporation, has reached a negotiated settlement with a Third Parry Defendants, namely Maine Central Railroad Company and Pan Am Railways, Inc. NOW, THEREFORE, BE IT ORDERED BY THE QTY COUNCIL OF THE CIN OF BANGOR THAT Me Guy Manager is hereby authorized to execute a settlement agreement with Frontier Communications Corporation and Third Party Defendants Maine Central Railroad Company and Pan Am Railways, Inc. in the matter of City of Bangor v. Citizers Communications Company, et al., Civil Action 02 -183 -B -S (D.C. Me), said settlement agreement to be substantially Me same as attached hereto and in a final form as approved by the City Solicitor or Assistant City Solicitor and a Side Agreement Regarding Evidentiary use of Railroad Settlement, said agreement to be substantially as attached hereto and in a final farm as approved by the City Solicitor or Assistant City Solicitor. IM = Co0 = April 25, 2011 ffitiw Made and Seconded for Passage Passed SY (nTiS,y e...w.._j4 og the ExecutIm of Settleasnt_� t=citizens c��ni�. fid ce�aoy. now ewer as U 99 C�C&4ons Corporation, and Third Party 0nfe to i'. '37 Sit AOREEMENT AND RELEASE THIS S=Et.IENi AGREEMENT AND RELEASE ("Agreement") is entered into by Mem CaruaiReilmad Conations, e Maim Crtral liailmad%and Pan Am Railways. Inc. ("Pan Am'), the Ianer formerly Saracen as GuilfnN Transportation Indua ron, Inc. (collectively. the "Settling Comments"), the City of Bangor, Maine (the "City"), and broader Comihurdcadimer; Corpamtion, formerlyknowa sa Cirsams Communications Compatry ("Prom1ar) frolleetively all portiere above, fee "Settling PanieA) to become eRective on the dee provided in Intergraph 1(h) below (&a"Ef carive WHEREAS, the Settling Parties agree that contamination associated with or and basements mbnancaa eaism in certain portions of DwmeRY Cove in red Penobscot River (ted "Sfic"S WHEREAS, ou or about November 22, 2002, the City filed acivil action in the United Stntce Dinner Court for District of Maim("District Cowl'),docketaAasCivil Action No. 02rov- 00183 (die "Action'), against FTondcr alleging Mffi some or all of the wovmmimmtipn at Ire Site reaolted from historical operation of a manufactured gas. plant want the intersection of Main Street and Paton Street (die "Singer MOP'), and seeking recovery, enter man, of costs incurred or to be insured at the Site for assessment, dmmenmnb claim tip, mitigation, removal, remedial carbon, or other response to mmol or threatened releases ofhdrrdous substances or enter contmnimnta and injumtive not of retaining frontier o remediate for Slm ("Response Costs'); WHEREAS, Maine Cental Railroad end Pm Am oavmd number cleaned the mil yard in Sector, Maine (the "Rail Yard"), which has at times occupied more than 30 acres along the berms of Dutmett's Cove: WHEREAS, Frontier sulloqumtly filed third patty, complaints in the Action against a number of thbd party defendants, including Maine Central Railroad and Pan Am; WHEREAS, Frontier wall the City entered into a settlement agreement i a which the City agreed to mWeemke the cleanup ofroe Sire and indemnify flantier fm all liability for such oleamp, and Frontier agreed to melee a payment to as memw account for Its cleanup of the Site; WHEREAS, Frontim and the City negotiated a Consent Damon ("Femme/City Cement Dei with the State o f Maine and the Mai rte Department of Environmental Promctlon ("grate') that was lodged tome District Court, WFIEREAS, de: Charter Court entered the FronterAfty Consent Decree an a partial final judgment am hater entered a final judgment to Ne Action, which inoeryomted Certain orders allowing Frontier to file its claims (iretention claom assigned to it by me City) against Maine Central Railroad, Pan Am and remain other Third Parry Defendants, in a new action in the District Coag deckled as Civil Action No. 07-cv-00113 (the "New Action'); WHEREAS, certain Third Party Defendants, appealed the partial final judgment and the final jmgmeat in the Action, which appeal were consolidated before the United States Court of Appeals forte Fina Cirmit (tlu "Appeals'): 1 aascvWsurmxetwateam�irto.w Ii 137 WHEREAS, the United Stares Coral OfAPPols for the Fid Circuit Wood an opinion deciding the Appeals And affimdng the judgments below on lWy 9, 2009, and WNEREAS, the Settling parties domes to canpmmiae, finery scule, Polly releaae and discharge all claims by and among diem related W rhe Action, the New Action, the Appeals, and the Sire As aitl to the m mt providai in this Agreement; NOW, THEREFORE, Po consideration of all Andral advenanta and stipulations ofdismioal captained herein and in coa3 iantlon. of the Pyramus by the Settling Defendants, as specifies in Parearaoh 2 offbis Adeamrnt the trades hello agree as follows: I. Release and Dismissal ofClaims, As of the I MY of tneir respective Past or imsent As well As any predeiressor corporations, I Paseo directors, officers, managers, hareholders, insurers, reinsurers, am, separately And collectively nowh a in unarareared, named or may have in the Bouton agmiam a Setting Deferment Released Party related W rhe Action, rise New Areca, the Appals, and the Site, excepting, however, any obligations specifically sn toll in this Agreement or in flue Consent Decree provided for in paragraph 3. fc) As soon as reasonably possical following Ne wdplete execution of Nis Agri Frontier, Maine Central Resonant. and Pan Am will jointly move, in the New Action. (i) fm a stay of All proceedings bnween them or against Maine Central Fail mad And For Am in AIndsmo Ant 105010e ["1.n 10w 'S7 the New Action, including discovery, pending carry by the District Com of the Cement Deese describd n paragraph 3 of this Agreement, (it) for entry of the Consent Decree micarfld in pmagapb 3 of this Agreement M fiml judgment; and (iii) for orders providing for disntissal with puJudice ofMc claims between Man, including all claims assigned to Frontier by the art, and all claims that have been brought by to City and any other Third -Parry Defendant against Maine Cannel Railroad and Pon Am in Ne New Action. Upon complete execution of this Agreement, Frontier, the City, Maine Central Railroad, and Pan Am agree that rine shall initime or require responses to discovery against or from each other in to New Action, unless the District Com directs otherwise or detemiues not to enter the Consent Decree described is paragraph 3 of this. Agrecment. (d) Notwhhstntding the releases provided bourn, ouch Smiling Pang agrees net to cause, in say subsequent action initiated by Ne Ureal Stares Environmental Protection Agency related to the Site, such releases m adefense many resulting contribution claim by my other Scttlingpmty. 2. Paveruma. Meisu Central Railroad and Pan Am shat make Namara in the aggregate armanscrat of$ 00,000, which if timely paid w prescribed below wiII conetlate Full Satisfaction of the amau ds owed m Former. Thou payments them the made in Imtallwassma the fiat of which chart be 200,000 due by wire turner on the earlier ofAugest 1, 2011 or the miry of to Concern Dxra described in peregreph 3 of due Agreement. The balance shall be road in 10 manlNy, commitments of $120,000 such, wit paymm¢ to be made by wire transfer on the first day ofeach successive month beginning after 30 days following to due date ofte first inualbn u The obligation to make these payments still be enfomeable 0uough the Consent Decree described below in paragraph 3 of this Agreement. �STRdi9aXi:2IlmsZ4; release of all the State's claims against Maine Central Raflsontl and Pon .._...._.._._..... ......... ......._ . gahood and Pan Am in (be New Action. The Consent Came shall not include any provisions tsimOiawiththis Agmcmenimthe FronticNcity Consmt Deome. Maine Centra Avlroad and Pan Am, Frontier and the City agree to infmnr Me District Com in Me joint motion for entry of the Consent Decree that (i)the mime of Maine Control Railroad and Pan Am, Frontier, and the City is emungent upon army of Convent Donee wit proJuions consistent with this Smiled and (ill each of Mane Central Railroad aM Pan Am. Founder, card the City mserves the rightm whhdraw its concert tremble Consent Donee in to event to District Court makes any 3 nrf[cusanenaVrsaioensrnv.0 caro 137 material modifications to the Consent Decree as lodged, and thereby renders the Consent Decree me osistem with mu Section (b) Phe"FIBeefive Date"ofthumAgreement wall"a Hata tim Consent Demo is amered by aw Distrot Conn pmrvant to ahbscofion (a), 4. Admission of Liabi , By mtaing into this Agreement, Maine Cental Rvlmed and Pm Am admitlability for the Site Contamination at Bumted's Cove to IM extent of $2 million. 5. No Third Pam RieM1ts. Notwialsunding any other provision of Urs Agreemmtto the contrary, mating in this Agreement shall be interprtad to create any train or benefitamaruiog to any person or early Amt a Sanford; Party, a Frol derlCity Released Patty, a Settling DeferdaM1t Released Piny, of the Smte of Marne. - 6. Claims Aamot Other lEmInn After the Effective Date, aponrenimble written request tram Frontier in mwwetioa emb Fmmierb settlement of any claims against any other party, the Settling DeFendams agree m execuk arelsom of arty claims ening out of or with regard m the Site Dames such parties. N settling Contribution Cholera against any other party, Frontier agrees to obtain a ranome from AM perry of any claims that perry may have molnar the Sealing Defendants with mmect to the Site. 7, Imemae Effect. We Agreement shall be cundurively Mining on not for the bmefitof the Selling Patties and their respective corporne auaessora(whetlmr by merger or purchase of all or who mdeay all antedate assets), designs, bmdraptcy m semen or damns, "stores mad o3mminramrs. B. Notices. Notices required m be given uder this Agreemem And be provided in writing delivered by bast, firmnIms, or overnight moil directed to each Settling Parys representative and to its counsel, ss follows: mithne Pct frontier Carvnwimiou[ Smarr K. mclo'n man S. Haps CoryanYon FlonOp Conanunirdipv Men P. Mame Cmpomn Meyer Brown LLP Three Hqm MdW Nak 1999 K now, N.W. SomtoN, CT 06905 WUM1ingbn DC Blme Maine Cmaal RalAmd and Pan Am Fm&dkF. msdw R¢EaNwn. Whinnw.UT, & Badger P O. Box 24N Harmer, My 04402.2429 day oFBmgve, Maine Nmm S. Habana City So1160, 11 Harrow snood Beogm, ME 04401 4 nw[wax@rtvncaiaU mu:l 1 are may I :�7 To all Site -rebased issues between the MY an the other hand, this Agreement. and supoisedes any sad all other Itds Agreement does not modify the - :pt that the City agrees. it shall not he trust Faihae t or Pan Am ginseng to the Settling Paries thin this Agreement this any kind or menswear, or, bi)they have mean mry notion in detrimental rebiame upon any oral promise mwmmmdcetion to effort modification of this Agreement. 10. Dwlicme Orinimis. This Affiament meY be executed in duplicate originals, eecM1 of which is equally ddmisslble into evidence. 11. Maine L This Agreement shall be coremi and mtofced narrator to the laws of the Sate of Maine. 12. 1a y' pp: The Sealing Paries hereby admit and consent to exclusive jurisdiction in hur United Statce Distant Court for the District of Maine for any actions lost may anx over Ne Performance, interpretation orcommitment of any prevision of this Agreement. The Singing Parties 0rha agree that they will be subject m personal judsdicdoo in the DuIrict of Maine for proposes of any nation arising out of any provision off as Agreement. 13. Join Pmoaretion ofAmemimeI This Agreanmr shall be interpreted as if it wart prepmai collectively by the Settling Paries, such that any uncertainty of ammituiry shell not be co¢atned egairat way Settling Party 14. Authority, Each Patty to this Agreement«pmsmm that the person signing on its behalf has been duty, authorized m execute this Agreement, and to enter into the settlement described he in. )The reit of this page is intentionally blauk.j i 1137 M WITNESS NERF,OF, the Senli% Parries have placed their anNodm sipetwea on the dates Rt fotlb below. FRONTIER COMMUNICATIONS CORPORATION Br: Title. Daze MAINE CENTRAL RAILROAD COMPANY AND PAN AM RAILWAYS, INC. BY: Title. Date: CITY OF BANGOR, MAMB BY: Thle: Date: ��2mgioa i W. -n Toro 6 l .77 SIDEAGREEMENT REGARDING EVIDENTIARY USE OF RAILROAD SETTLEMENT _ THIS SIDE AGREEMENT REGARDING EVIDENTIARY USE OF RAILROAD SETTLEMENT (the "Side Agrorment") is entered into effective April _, 2011, by the City ofBamgm, Maine (the "City"), and Frontier Communications Corporafioq formerly known in Cifizens Communications Company ("Frontier'). WFIEREAS, the City and Frontier me panics to a remain Settlement Agreement and General Release made effective on or about February 16, 2007 (hereinafter, the "SaWementAgrement"); and WHEREAS, the City and Frontier wish to enter into a settlement agreement with Maine Central Railroad Company ('Main Central")and Pan Am Railways, Inc. (`Pam Am'), in the Form attached hereto as Exhibit F (the "Railroad SenlemenC), which would Love the effect of modifying the effect or certain provisions of the Settlement Agreement; and WHEREAS, the City and Frontier Settling have idenritied possible disagreements regarding The interpretation of the Settlement Agreement, which possible disagreements they both believe would be best resolved after execution of the Radical Settlement; and NOW, THEREFORE, in consideration of the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the City and Frontier agree as follows: The modifications to the Settlement Agreement made by the Railroad Settlement shall not be used as, or otherwise considered to be, evidence in any lawsuit or other proceeding involving rights or obligations of the City or Frontier arising under the Settlement Agreement, except on the sole issue of showing that the City has no right under the Settlement Agreement to recoveries from Maine Central or Pan Am. M WITNESS HEREOF, the Settling Prince have placed their authorized signatures on the dates set forth below. FRONTIER COMMUNICATIONS CITY OF BANGOR, MAINE CORPORATION AMECVRPE1Jr1wa5T/Ia2ry.pp.11 lnl<