Fine for illegal dumping can’t be wiped out in bankruptcy, state says

The state hopes to prevent a man facing a $2.65 million fine for the illegal disposal of radioactive waste from erasing that penalty in bankruptcy court.

The state Cabinet for Health and Family Services wants a judge to determine that Cory Hoskins’ debt is “nondischargeable,” meaning it can’t be wiped out in Chapter 7 bankruptcy, according to a complaint filed in U.S Bankruptcy Court.

The cabinet, citing federal law, says an individual debtor should be not discharged from any debt that is payable to a government unit and that is not compensation for “actual pecuniary loss.”

Hoskins, through his company Advanced TENORM Services LLC, imported or arranged for the collection, transport and disposal of 2.4 million pounds of low-level radioactive waste from West Virginia and Ohio. The waste was dumped into landfills in Estill and Greenup counties from June 2015 through January 2016.

TENORM is an abbreviation for “technologically enhanced naturally occurring radioactive material,” which is a byproduct of pressurized oil drilling or fracking.

In November, the state sought more than $8 million in penalties against eight companies involved in the transport or disposal of out-of-state waste in Kentucky.

The cabinet says the $2.65 million civil penalty against Hoskins doesn’t include recovery for future abatement and remedial costs at either landfill. Another Cabinet, the Energy and Environment Cabinet, is seeking remediation costs through the landfills that accepted the out-of-state waste.

Hoskins appealed his civil penalty in December. On March 16, Hoskins notified the cabinet of his bankruptcy filing and automatically stayed his administrative appeal. No state hearing has been rescheduled.

The state also sought a separate penalty of $2.65 million against Advanced TENORM Services. The Cabinet for Family and Health Services doesn’t seek to have that penalty declared “nondischargeable,” attorney Jennifer Wolsing said.

“If you are a corporation and you file for Chapter 7 bankruptcy and after the bankruptcy is done, the corporation dissolves,” Wolsing said. “So that means there would be no entity to go get that debt after the bankruptcy is over.”

None of the other firms fined by the state have filed for bankruptcy.

“Every other entity has at least engaged in settlement talks with us,” Wolsing said. “The only exception has been Cory Hoskins and Advanced TENORM Services. We reached out to them at least twice to say, ‘Hey, do you want to talk to us about settlement options?’ and not a word. They didn’t want to do it.”

Louisville attorney James R. Irving, who represents Hoskins, did not respond to a request for comment.

This story was originally published April 6, 2017 at 3:02 PM with the headline "Fine for illegal dumping can’t be wiped out in bankruptcy, state says."