Exhibit 1

Case 3:14-cv-01772-MO Document 33-9 Filed 04/10/15 Page 1 of 5
VIA E-MAIL AND 

FIRST CLASS MAIL 

Lori Houck Cora 

Assistant Regional Counsel 

Office ofRegional Counsel 

U.S. Environmental Protection Agency 

Region 10, ORC-158 

1200 Sixth Avenue 

Seattle, WA 98101 

October 2, 2009 

Direct Phone 

SOJ-2 I 9-81 JJ 

Direct Fa c simile 

800 -6 00 - 2 I 38 

E-Mail 

butt h@ roberts ka pian . com 

Re: Linnton Plywood Association ("LPA '')/Environmental Protection Agency ( "EPA") 

FRE 408 CONFIDENTIAL SETTLEMENT COMMUNICATION 

Dear Lori: 

This confirms LPA's commitment to achieve a settlement with EPA that resolves LPA's 

CERCLA liability in the Portland Harbor Superfund site. You have requested that LPA submit a 

settlement proposal. We are preparing to do so. Preliminary to that, we intend to provide in this 

letter the information you requested relative to LPA' s financial circumstances that particularly 

bear on its ability to pay and the limited opportunity it has to pay. We have nearly completed a 

letter to you and Kristine Koch which will respond to the questions articulated by Kristine during 

our meeting in Seattle on July 13, 2009. We will have it sent to you within a few days. With 

these letters and the information contained in them as a foundation, we will propose settlement 

terms for your consideration. 

This letter responds to your questions about LPA's finanCial circumstances. 

First, providing information about LPA's insurance coverage is not as easy as enclosing a 

copy of the policies. The applicable insurance policies were written by General Insurance 

Company of America, predecessor of SAFECO Insurance; Safeco in turn is a more recent 

predecessor of Liberty Mutual, LP A's present insurer. Based upon current information, 

SAFECO and now Liberty have advised us that LP A may have a total of $1,900,000.00 worth of 

coverage related to Superfund liability under 19 confirmed and unconfirmed policies 

($100,000.00 of coverage for each policy year from 1966 to 1985.) SAFECO acknowledges that 

based upon present information SAFECO must recognize coverage under the unconfirmed 

JOI<:Ittl4D.SW Second Avenue, Suite 1800 Portland, Oregon 97204 I PHONE: 503.221.0607 1 FAx: 503.221.1510 1 WEB: robertskaplan.com 

Case 3:14-cv-01772-MO Document 33-9 Filed 04/10/15 Page 2 of 5
Lori Houck Cora 

October 2, 2009 

· Page 2 

policies for which only secondary evidence exists. 1 SAFECO has issued a "Reservation of 

Rights" as to all of the policies. Our understanding is that these are wasting policies, i.e. defense 

costs are deducted from the coverage, and to date there is approximately $1,500,000.00 still 

available. We are contacting the insurance company about settlement and their response will 

form the settlement proposal we would hope to submit shortly. 

With regard to the contingent sale to BP, there remain a number of unresolved conditions, 

the most significant of which is resolution of"environmental claims". Whether BP or another 

entity is the purchaser, we expect that closing of such a transaction will require protections to be 

provided by EPA in the nature of a prospective purchaser agreement as appears to have been 

contemplated in the Statement of Work attached to EPA's AOC for the Remedial 

Investigation/Feasibility Study (US EPA Docket Number CERCLA-1 0-200 1-0240). Using the 

I The following statement is excerpted from Safeco correspondence dated May 8, 2008: 

General has confirmed that it has issued the following policies identified in the table below. Each year of coverage 

provided a limit of $100,00.0 per occurrence and $100,000 aggregate in property damage liability. 

Confirmed Policies 

Policy No: 

CP383478 

CP646638 

CP646638A 

CP646638B 

Effective Dates 

4/23173 to 4/23176 

4/23176 to 4/23179 

4/23179 to 4/23/82 

4/23/82 to 4/23/85 

Liab. Form Cond. Form 

C-10 1173, C1652 1173, 

C-10 9174*, C1652 5174*, 

C1138 4178, C1652 8178, 

CI 138 4178*, CI652 8178*, 

Pollution Exclusion 

C1599 1/72 

C1599 1/72* 

C1599 1/72 

CGL212C1 4/80* 

*Policy forms are unconfirmed. The noted forms are those that were likely to have been issued with the referenced 

policy. 

Secondary evidence exists to suggest that the following policies were issued to LPA, and each of the policies listed 

in the table below is believed to have provided a limit of $100,000.00 per occurrence and $100,000 aggregate in 

property damage liability. The applicable forms noted are the forms most likely to have been issued with each 

policy. 

This information, from secondary evidence, is unconfirmed and General reserves all of its rights to amend the policy 

information should the actual policy be revealed or if other policy information arises. 

Unconfirmed Policies 

Policy No. Effective Dates 

BLP2324 79 4/23/66 to 4/23/67 

CP 160977 · 4/23/67 to 4/23170 

CP276891 4/23170 to 4/23173 

(effective 4/23171) 

30167240.2 

Liab. Form 

C-10 1165 . 

C-10 1167, 

C-10 1167, 

Cond. Form Other Pollution Excl 

CF640 10/66, CF646 10/66 

CF640 6/69, CF646 1167, C-1599 11170 

Case 3:14-cv-01772-MO Document 33-9 Filed 04/10/15 Page 3 of 5
Lori Houck Cora 

October 2, 2009 

Page 3 

BP transaction as an example and assuming that all of the conditions precedent can be met, 

closing the transaction would provide numerous benefits to the harbor through the 

redevelopment plans proposed by BP, and would result in $6.5 million grpss proceeds to LP A. 

This is Jess tha an_ earlier sale that waS" lost due to concerns over environmental liabilities. 

LPA started its operations as a co-op in 1951. In 1972, LPA purchased the bulk of this 

former lumber mill site, and later purchased a small parcel in 1973. As stated by many of the 

oldest, surviving members of LP A, a goal in purchasing the property was to have an asset tha 

would one day be solcLto benefit the members over and above the operations of the plywood 

mill. The net proceeds from LPA's operations during each fiscal year were allocated to the 

members ofLPA in accordance with the ratio each membeL's hours worked ('1>atronage 

Credits") bore to the total Patronage Credits of all members during that year. To capitalize the 

cooperative, LP A retained a portion of those credits ("Retains"). Members were individually 

required to pay tax on all of their share of these credits. 

· LPA ceased operations, for all intents and purposes, and adopted a plan of liquidation in 

December 2001. Leading up to that termination there were a number of difficult years that 

resulted in losses that forced those members who continued to work at the mill to lose some or 

all of their Retains. 

LPA has been involved in litigation initiated by shareholders and former members 

regarding its continued operations, the sale of the property and the distribution of proceeds. 

Settlement of this litigation has in part been conditioned upon LPA's agreement to distribute 

proceeds in accordance with amended Bylaws. These are intended to balance the sacrifices 

made by all members who were trying to keep the mill viable in the hope that the property could 

be sold. At present there are 199 individuals with Retains (some which have been on the books 

since 1985) or shares of stock. Some members have died; the survivors are generally over 70 

years of age. 

As it stands using the BP transaction as a model, sale proceeds must be distributed as 

follows: 

A. $1.5 million to accrued liabilities and costs of sale; 

B. $3.2 million for share redemption and refund of Retains; and, 

C. $1.8 million to members with Retains on the books of LP A under a formula that 

recognizes the appreciation in the property during the time these members were 

working but not getting paid their Retains. 

After fulfilling these obligations, there would be little or no sale proceeds for LP A to 

contribute to settlement. At best, LP A will work with the insurer to determine what authority 

they may extend towards achieving the settlement we seek. 

30 167240.2 

Case 3:14-cv-01772-MO Document 33-9 Filed 04/10/15 Page 4 of 5
Lori Houck Cora 

October 2, 2009 

Page4 

We look forward to further communication and invite your questions about this 

information. 

Very truly yours, 

William P. Hutchison 

WPH/dod 

30167240. 1 

Case 3:14-cv-01772-MO Document 33-9 Filed 04/10/15 Page 5 of 5