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BKF Capital Group, Inc. Provides Environmental Liability Disclosure Update

BKFG | September 1, 2016

BKF Capital Group, Inc. Provides Environmental Liability Disclosure Update

BKF Capital Group, Inc. (OTC: BKFG) was contacted in 2015 by the United States Department of Justice (“DOJ”) regarding its potential liability under the Comprehensive Environmental Response, Compensation and Liability Act, 42 USC 9601 (“CERCLA”) for the cleanup of contaminated acreage in Highlands County, Florida. The contamination stems from the three “cattle dip vats” which existed from approximately 1923 to 1995. The cattle dip vats contained arsenic and other compounds used for the eradication of insects (ticks).

Representing the U.S. Air Force, DOJ alleges that BKF is liable as a past “owner” under CERCLA of the contaminated land. This theory of ownership derives from BKF’s corporate predecessor, Baker, Fentress & Company, (survivor by merger in 1971 with Consolidated Financial Corporation formerly Consolidated Naval Stores Company) which owned the land from 1902 until 1942. The US government acquired the land through condemnation in 1942 and the Air Force then developed it into a bombing range. The U.S. Air Force began cleaning up the vats in 1997 and completed the cleanup in approximately 2009.

BKF was recently notified by its legal counsel that the U.S. Air Force is claiming past and future cleanup costs for the three vats is approximately $5,000,000. BKF has retained an experienced environmental consulting firm to review and analyze the validity and recoverability of them. To recover cleanup costs under the CERCLA statute, they must be deemed “necessary” costs of response and “consistent” with the National Contingency Plan, a highly technical regulation governing CERCLA cleanups.

BKF’s position is that it is not responsible to pay the full amount of the claimed cleanup costs. BKF is pursuing settlement discussions with DOJ to work out a fair allocation of the costs between BKF as a “past owner” and the U.S. Air Force as the “current owner” under CERCLA. This matter is not in litigation and BKF signed a Tolling Agreement with DOJ, postponing the tolling of the statute of limitations on the U.S. Air Force’s claims.