City to pursue Wilson claims

Published 12:00 am Tuesday, August 13, 2002

The Albert Lea City Council Monday passed a motion which approved a legal representation agreement to assist in Farmland insurance recovery.

The lawsuit that the city is pursuing is looking to sue the former insurers of the now-bankrupt Wilson Foods, Inc. prior to 1982 for the costs of environmental cleanup. The lawsuit focuses on a very specific area of the law which states that companies are liable for their environmental damages under certain insurance policies.

&uot;Before 1982, we had very different environmental insurance policies than we have now,&uot; explained City Manager Paul Sparks. &uot;Even though Wilson is now bankrupt we can still get money from their old insurance policies.&uot;

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The city has already spent $7,500 to pay a research company to find these old policies for Wilson and to pursue copies of the policies for litigation.

In light of these findings, the city hired Matthew Cockrell from Chicago, Ill., who according to Sparks is a specialist in this &uot;narrowly defined legal work of pursuing environmental claims against bankrupt companies.&uot;

Cockrell, under the agreement, will work on a contingency basis which allows for him to collect a third of the recovered funds. The highest possible amount of funds that could be recovered is $1.8 million, of which he would take $600,000.

The agreement also calls for an extra $20,000 for the lawyer’s travel, research and other miscelaneous fees that are neccesary in order to complete his work.

The council voted that that cost be capped at $20,000 in order to set a limit on the city’s obligation. That cap can be raised in the event that circumstances call for it, and City Attorney Steve Schwab said he believes Cockrell will most likely agree to a cap.

While this lawsuit may help to ease the burden of the estimated $2.5 million clean up bill, the city will have to look beyond the lawsuit for the rest of the funding, including federal and state grants.