The RACER Trust (Revitalizing Auto Communities Environmental Response Trust) was created in March 2011 by a consent decree in the United States Bankruptcy Court for the Southern District of New York to clean up and position for redevelopment certain real properties owned by the former General Motors Corporation (“GMC”) and various GMC affiliates at the time of GMC's bankruptcy in 2009.
Through its bankruptcy proceeding, GMC became known as Motors Liquidation Company ("MLC") and has since been effectively dissolved. Before its dissolution, MLC was carved into five separate trusts; the first to settle the claims of unsecured creditors (General Unsecured Creditors Trust); the second (RACER) to manage, perform environmental activities at, and ultimately dispose of certain remaining MLC real and personal property assets; the third to manage asbestos-related claims (Asbestos Personal Injury Trust); the fourth for litigation claims (Action Avoidance Trust); and the fifth for general unresolved GMC matters (MLC Debtor In Possession Lenders Trust).
At its inception, RACER's portfolio included properties at 89 locations in 14 states, comprising 358 individual parcels and more than 7,000 acres of primarily industrial land, making RACER one of the largest holders of industrial property in the United States. When it was formed, RACER was the largest environmental response and remediation trust in U.S. history.
RACER is headquartered in Detroit, Michigan. Its administrative trustee is EPLET, LLC, the managing member of which is Elliott P. Laws, a former assistant administrator of the U.S. Environmental Protection Agency's Office of Solid Waste and Emergency Response and a partner in the law firm Crowell & Moring. The Bankruptcy Court appointed EPLET, LLC to a five-year term as administrative trustee when RACER was established in 2011; EPLET, LLC was then reappointed to a second term in 2016 and a third term in 2021.
The Settlement Agreement assigns RACER two general roles regarding the former GMC properties in the RACER portfolio. First, RACER manages these properties while under RACER ownership and performs certain environmental cleanup of them where needed, even in some cases after RACER is no longer the owner. Second, RACER seeks to sell or transfer the properties for productive or beneficial reuse.
RACER is not a government entity but rather an independent trust with the United States of America as its sole beneficiary.
Background
On June 1, 2009, General Motors Corporation filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York. On October 9, 2009, Remediation and Liability Management Company, Inc. (“REALM”) and Environmental Corporate Remediation Company, Inc. (“ENCORE”) each filed voluntary petitions for relief under Chapter 11.
On July 5, 2009, the bankruptcy court approved the sale of the old GMC's good assets to a new General Motors Company (“New GM”). Following the sale of assets, the old GMC was renamed Motors Liquidation Company (“MLC”). The new GM did not purchase all plant locations, and most that remained with MLC were transferred to the RACER Trust for environmental remediation in preparation for sale or transfer.
Parties to the consent decree and settlement agreement that established the RACER Trust included MLC, REALM, and ENCORE (collectively the “debtors”); the United States of America; the states of Delaware, Illinois, Indiana, Kansas, Michigan, Missouri, New Jersey, New York, Ohio, Virginia and Wisconsin; the Louisiana Department of Environmental Quality, the Massachusetts Department of Environmental Protection; and the Department of Environmental Protection for the Commonwealth of Pennsylvania (collectively the “States”); the Saint Regis Mohawk Tribe; and EPLET, LLC, in its capacity as administrative trustee.
Properties
MLC's portfolio included properties at 89 locations in 14 U.S. states. These properties totaled more than of land and nearly of structural area. By the time MLC's assets were transferred to RACER Trust, MLC had sold six properties outright and a portion of a seventh. While RACER Trust was conveyed the remaining properties, it was transferred the environmental cleanup and monitoring responsibilities of all properties that required environmental remediation and long-term monitoring, regardless of whether the property had changed ownership. Sixty of the properties carried environmental obligations, including four sold by MLC prior to RACER Trust's creation.