(The following was published in the South Bend Tribune 11/9/05)

SOUTH BEND SETTLES ENVIRONMENTAL CASE
LAWSUIT AGAINST STUDEBAKER'S SUCCESSOR CONTINUES

By JAMIE LOO
Tribune Staff Writer

11/9/05

SOUTH BEND -- The city settled its environmental case with Allied Products Corp. but is still involved in a lawsuit with Studebaker's insurers.

City officials and the attorney for the two cases, Jeff Featherstun of Plews, Shadley, Racher and Braun, wouldn't disclose the amount awarded in the settlement. Featherstun said a confidentiality agreement with Allied bars them from discussing it.

The Common Council approved transfer of the settlement money to Fund 209, a city Community and Economic Development fund. Fund 209 is for nontax revenue money such as federal grants and private donations, specifically related to the Studebaker/Oliver Revitalization Project. All money in the fund goes toward redevelopment for the corridor.

Public records for transactions in Fund 209 for the month of October show a "proceed settlement" of more than $600,000. Featherstun would not confirm or deny that amount.

In the early 1990s, the city found environmental contamination affecting the soil and groundwater at the former Studebaker facilities and surrounding area. Allied Products Corp. occupied some of the former Oliver Plow Works properties and a nearby stamping plant on South Franklin Street.

Two separate lawsuits were filed to help the city recover costs for contamination cleanup and building demolition, according to Tribune archives.

The city entered a claim in the bankruptcy case of Allied Products Corp. in U.S. Bankruptcy Court in Chicago. The city was one of 374 parties involved in the bankruptcy case. In 2003, Allied offered $3.4 million just to parties involved as environmental claimants, which the city declined.

The other environmental case in the Studebaker/Oliver Corridor involving Studebaker's successors has taken many twists and turns. Studebaker Corp.'s alleged liability insurance company, McGraw-Edison Co., tried to claim it was not the legal successor to the Studebaker Corp.

But in August, Marion County Superior Court ruled that McGraw-Edison is the legal successor. The court also denied McGraw-Edison's motion for a summary judgment on all claims.

"We think this is a pretty significant ruling," Featherstun said.

Featherstun said he is hoping for a trial in the McGraw-Edison case in 2006.

Tribune staff writer Jeff Parrott contributed to this report.