USA - Bankrupt Columbus Castings has history of violations

Reading time: min

For years, Columbus Castings has been cited for environmental and workplace violations.

The steel foundry based in Columbus dates back to the 1880's and is embroiled in federal bankruptcy proceedings in the Delaware district.

It's not the first time that the company has filed for Chapter 11 relief. As a result of mounting debt levels and failing to comply with environmental regulations that come with fines totaling over a million dollars, the company is hoping to sell the foundry to a new owner.

It's unclear if the issues will deter prospective buyers.

"The buyer's going to do a lot of due diligence about the company and that goes beyond just the financial statements," said A.C. Strip, a bankruptcy attorney who has experience handling financial issues with companies. "That all requires time, money, and effort and there may be other -- I wouldn't say hidden issues but issues that aren't apparent."

Jennifer Mercer, a spokesperson for Columbus Castings, said the company does have a letter of intent from an interested buyer. The companies had not reached an asset purchase agreement as of Tuesday afternoon. She was unable to readily respond to questions about violations.

Records show some residents near the foundry have called the Ohio Environmental Protection Agency to complain about emissions. The emissions leave dust and emit burnt metal smells.

"If people get the sense there might be violations, I would encourage them to call and we'll go out and do an inspection," said James Lee, a spokesman for Ohio EPA.

Last year, the calls resulted in 13 additional inspections.

Lillie Banner, a neighbor, said she has to routinely powerwash her home and sweep her porch often.

"You shouldn't have to do that," she said.

Most of the environmental violations are based on the Clean Air Act. The company remains out of compliance with equipment that is not maintained resulting in an excess of emissions.

"U.S. EPA believes the facility needs to take action to reduce its emissions of particulate matter into the air," according to an issued statement.

At the request of residents, Ohio EPA installed a temporary air quality monitor but found nothing alarming.

An Ohio State University professor took soil samples from neighbors' yards near the foundry. He found eight metals were found to occur at "statistically-significantly greater levels than natural Franklin County background levels," according to the report.

Most of the samples were below risk-based residential soil screening levels though.

Columbus Castings has also violated the Clean Water Act for the last three years. EPA officials say the water discharged from the foundry doesn't harm human drinking water but instead potentially impacts wildlife.

The company met with environmental officials on April 29. Non-compliance can eventually result in issuing a compliance order, penalties and bringing civil or criminal action. When asked about the meeting, officials with EPA, issued a statement saying it could not "disclose the details of the meeting because this is an ongoing enforcement case."

Columbus Castings would not respond to specific issues but released a statement late Tuesday and said, "Columbus Castings takes its environmental responsibilities very seriously and not only has put in place its own its own stringent guidelines but continues to work with various agencies to ensure we meet EPA and other agency standards. Protecting the community and the residents where we operate is a priority."

Nearby residents have graver concerns about health issues from emissions coming from Columbus Castings.

One federal violation noted excess emissions can cause health problems such as "difficulty breathing, aggravated asthma, chronic bronchitis, and premature death in people with heart or lung disease."

A former employee of the foundry told ABC 6 On Your Side the company struggled with maintenance of the equipment.

Records from Occupational Safety Health Administration also show the company had more than $80,000 in fines from violations.

Some were from power source issues, others for machine requirements. A fire broke out at the foundry in 2007. Company officials admitted they needed to upgrade equipment to stay competitive, but it would be a costly investment.

A new OSHA complaint was made this month.

Scott Allen, director of public affairs for OSHA, said details of the case would not be released until the investigation is completed.

The federal agency has six months to complete the investigation.

In the meantime, Columbus Castings' as well as other companies making up Constellation Enterprises, remains in bankruptcy court. The collection of companies is owned by Protostar Partners. Protostar had purchased Columbus Castings in 2008.

The last time the company filed bankruptcy was in 2002. That could actually help a new owner.

"Less monthly payments to a bank, smaller interest rate, better terms -- now all of a sudden they're profitable. So very often the second or third owner of a business can make it where the first owner cannot," Strip said.

With financial issues, the need for improvements and 800 jobs on the line, the company hopes to restructure and sell Columbus Castings by July.