UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT
REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934
November 13, 2007
Date of Report
(Date of earliest event reported)
P. H. Glatfelter Company
(Exact name of registrant as specified in its charter)
Pennsylvania
(State or other jurisdiction of incorporation or organization)
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00d1-3560
(Commission file number)
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23-0628360
(IRS Employer Identification No.) |
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96 South George Street, Suite 500
York, Pennsylvania 17401
(Address of principal executive offices)
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(717) 225-4711
(Registrant’s telephone number, including area code) |
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement.
On November 13, 2007, the Second Agreed Supplement to Consent Decree (the “Second Supplement”) was
filed with the U.S District Court for the Eastern District of Wisconsin. The Second Supplement is a
supplement to the Operable Unit 1 (“OU1”) Consent Decree previously entered into between the United
States of America and the State of Wisconsin, as plaintiffs, and the Company and WTM I Company, as
defendants for remedial activities at the lower Fox River. As discussed in Glatfelter’s September
30, 2007 Form 10-Q, under the Second Supplement, Menasha Corporation, another potentially
responsible party (“PRP”) agreed to deposit $7 million into the OU1 Escrow Account to secure
performance of the remediation work in OU1 that is currently planned for 2008.
This description is qualified in its entirety by reference to the Second Supplement, which is
attached as Exhibit 10.1 to this Current Report on Form 8-K.
Item 8.01 Other Events.
The Company has previously reported that various state and federal governmental agencies have
formally notified the Company and eight other potentially responsible parties (together the “PRPs”)
that they are potentially responsible for response costs and natural resource damages (“NRDs”)
arising from PCB contamination in the lower Fox River and Bay of Green Bay (the “Fox River Site”).
The United States, on behalf of certain governmental authorities, is pursuing responsible parties
to remediate the contaminated areas of the Fox River, to satisfy NRD claims, and to reimburse the
governmental authorities for past costs.
On November 15, 2007, the U.S. Environmental Protection Agency (“EPA”) issued to the PRPs,
including the Company, an Administrative Order For Remedial Action (the “Order”) directing the PRPs
to implement the remedial action for Operable Units 2, 3, 4, and 5 of the Fox River Site as set
forth in the previously issued Record of Decision and Record of Decision Amendment (the “ROD” and
“ROD Amendment”, respectively). In the Company’s periodic filings with the Securities and Exchange
Commission, including its September 30, 2007 Form 10-Q, the Company disclosed details surrounding
the Fox River Site including the possibility that such an order could be issued.
Prior to the issuance of the Order, the EPA and Wisconsin Department of Natural Resources (“WDNR”)
determined that the remedial action for OU2-5 should be conducted in two main phases: Phase 1 which
would consist of an expedited response to remediate a particular area with especially high
concentration of contamination; and Phase 2 which would consist of
remediation of the balance of OU2-5. The
remedial action for the Phase 1 portion of the Fox River Site is currently being implemented under
a separate Consent Decree, to which Glatfelter is not a party. The EPA and WDNR also determined
that in order to commence full scale remedial actions for the remaining portions of OU2-5
contemplated by Phase 2 by the start of the 2009 construction season, significant preparatory
activities would need to be completed.
The Order
directs certain PRPs, not including Glatfelter, jointly and severally, to conduct the preparatory activities
(“Phase 2A Work”) consisting primarily of equipment procurement, site staging, infrastructure, etc.
Phase 2A Work is to be completed by December 2008. Further, the Order directs each PRP, including
Glatfelter, jointly and severally, to commence full scale sediment remediation according to the ROD and ROD Amendment by
the beginning of the 2009 construction season (“Phase 2B
Work”). The Order also imposes on the PRPs an obligation to pay governmental oversight costs for Phase 2A
and Phase 2B as they are billed.
The Order does not resolve issues surrounding allocation of liability for the remediation
costs of OU 2-5 amongst the PRPs. The Order, however, does provide that, on or before November 28,
2007, the PRPs may make written submissions to the EPA setting forth “sufficient cause” for not
complying with the Order. The Company has previously reported in its periodic filings with the
Securities and Exchange Commission, including its September 30, 2007 Form 10-Q, that it believes
that it has strong defenses to liability for remediation of OU 2-5 including that there is ample
credible data that indicates that PCBs did not leave OU1 in concentrations that could have caused
or contributed to the need for cleanup more than 20 miles downstream in OU2-5. Others, including
the EPA and other PRPs, disagree with the Company and, as a result, this matter could result in
litigation. Even if Glatfelter is not successful in establishing its
non-liability for OU2-5, the Company does not believe that it would
be allocated a significant percentage share of liability in any
equitable allocation of the remediation costs and other potential
damages associated with OU2-5. If the Company is ordered to complete
more than what it believes to be a fair share of any remediation
efforts, the costs to do so could be significant.
The Order also requires each PRP directed to perform the Phase 2B Work (“Phase 2B PRPs”) to notify
the EPA no later than August 1, 2008 whether it intends to comply with the Order. In addition, the
Order requires that one or more Phase 2B PRPs demonstrate their ability to complete the Phase 2B
Work and to pay all claims arising from the performance of the Phase 2B Work by providing one or
more forms of financial assurance to the United States specified in the Order by no later than
January 15, 2009. At present, it is uncertain which, if any, Phase 2B PRPs will perform the Phase
2B work or what form of financial assurance will ultimately be provided and by whom. If Glatfelter
is ordered to provide more than what it believes to be a fair share of any financial assurance,
such actions could have a material adverse affect on its consolidated financial position and/or
affect its compliance with covenants under its debt agreements.
The Company is in the process of evaluating the Order, its legal options, and the
impact, if any, that the Order has on its assessment of its liability at the Fox River Site.