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What's Next For Bankrupt San Diego Landfill Developer?

Damon Nagami

Posted February 19, 2014

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Last week, the San Diego Union-Tribune reported that three of the original investors in the Gregory Canyon landfill project are seeking bankruptcy protection. This is not a good sign for the highly controversial project, which NRDC has opposed for many years due to the profound impacts the proposed landfill would have on sacred Native American lands, San Diego County’s drinking water aquifers, and the San Luis Rey River and its watershed.

It's our understanding that on February 12th, three long-time investors and members of Gregory Canyon Ltd. LLC (GCL) filed a petition for involuntary bankruptcy under Chapter 11 (reorganization). The next day, GCL accepted the filing and transformed it into a voluntary bankruptcy. What this means is that in the next few weeks, GCL is likely to file papers in court that would identify the value of the real and personal property it owns, any security interests in that property, and the amount of secured and unsecured debt it owes. We and our allies, including the Pala Band of Mission Indians, are monitoring the proceedings and will report on matters as they develop.

This bankruptcy proceeding is the second significant setback for the landfill project since the beginning of the year -- and we're only in February. Last month, the San Diego Air Pollution Control District cancelled GCL's air permit application because the developer is behind on payments to the District for work performed as well as late fees, to the tune of more than $300,000. Add in the fact that waste disposal in San Diego County is declining and existing landfills still have ample capacity, and what you're left with is a financially questionable project that appears to be in serious trouble.

One more update, and the last one for now, is that as a result of these developments, it’s our understanding that the processing of all permits is on hold. This is welcome news to the broad and growing coalition of San Diego County residents, Native American tribes, environmentalists, farmers, elected officials and others who oppose this landfill and who will not stop fighting until it goes away for good.

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Ruth HarberFeb 20 2014 10:45 PM

Damon: Good blog! I do have some questions

The court documents I hare show "involuntary bankruptcy". Were any changes filed by GCL:?

I also thought that the Air Quality permitting was suspended - not cancelled

I guess you must know something that I don't know.. although Everett DeLano always keeps me updated.

Thanks for an expected response.


Damon NagamiFeb 24 2014 12:37 AM

Hi, Ruth -

My understanding is as I said in the blog post -- that GCL transformed the proceeding into a voluntary bankruptcy. I will look for the relevant document(s) and send them to you offline.

With regard to the air permit, I understood that the application was cancelled, but that if GCL were to come up with the funds it owes to the District, it could reapply and get back up to speed reasonably quickly since the District already has much of the supporting documentation. In any event, whether you call the permit cancelled or suspended, the main point is that GCL owes the District a chunk of change and nothing is moving forward until they pay up.

We're working closely with Everett, so I will talk to him and if anything I said in the post is incorrect, I'll make the necessary changes. As always, much thanks to you and your organization, RiverWatch, which has fought this terrible project for many years. Let's keep up the momentum!


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