Centerbridge-Backed Lab Under Pressure After Chemical Fire

Weeks after a chemical warehouse fire in Rockdale County, Georgia, released plumes of toxic smoke, nearby residents can now leave their homes at night after officials lifted a shelter in place order. For the lab’s owner and investors, the trouble isn’t over.

Locals are suing Bio-Lab Inc. for allegedly acting negligently before its chemical storage facility caught fire Sept. 29. A federal agency is , and some elected officials are for permanent closure of the facility, which has seen four emergencies in the past 20 years, according to government records.

Read More: More Georgia Residents Sue Company Over Toxic Chemical Release

On Wednesday, attorneys from a law firm involved in the $600 million settlement in the East Palestine, Ohio train derailment last year advised residents on next steps in litigation they filed against Bio-Lab and its parent KIK Custom Products, Inc.

One of those lawyers, Mark Chalos, managing partner of Lieff Cabraser Heimann & Bernstein, advised potential plaintiffs to keep records of their symptoms as well as their relocation and remediation costs, and require documentation from any Bio-Lab representative seeking access to their property for debris clean-up or other purposes.

“Over the years, our company has been rigorous about actioning enhancements to our facilities, policies, and practices,” a spokesperson for Bio-Lab said in a statement, but declined to comment on the lawsuits or the fire. The firm has set up a call center and assistance for those affected by the fire.

KIK Consumer Products, which also manufactures laundry and other household cleaners, is owned by Centerbridge Partners, a private equity firm that manages $38 billion in capital. KIK and Centerbridge both declined to comment.

At a press conference Thursday, Rockdale County’s chief executive officer Oz Nesbitt said officials were engaging Bio-Lab management on measures it wants taken, which he did not specify.

“Bio-Lab has held this community hostage for the past 19 days,” said Nesbitt. “Enough is enough.”

Markets React

Investors quickly took note of potential losses.

Credit traders fielded a flurry of inquiries on KIK’s debt, which includes a $450 million unsecured bond, according to people familiar with the matter who asked not to be named discussing the matter. The note, due in 2032, ultimately fell by more than eight cents on the dollar, particularly after Congressman Johnson for its closure. Johnson represents Georgia’s Fourth Congressional district, which includes Rockdale County that has a population that is 63% Black.

A secured bond due 2031 declined by nearly five cents after the news, but it remains above par.

The various lawsuits filed against Bio-Lab and KIK are seeking class-action status to represent some of the more than 90,000 Rockdale County residents instructed to shelter in place and 17,000 in the lab’s home town of Conyers, Georgia, who were instructed to evacuate after the fire began.

One cites damages of more than $5 million and a potential class of more than 100 members. Another, filed Oct. 7, proposes one class of residents exposed to the chemicals and another composed of affected business owners and employees. Yet another hit just this week.

The Georgia Poison Center has received reports of over 2,800 incidences of symptoms, mostly ocular and respiratory, with one or two reported as being severe, according to the center’s executive director Gaylord Lopez. It estimates that 92% are related to the Bio-Lab fire.

Chalos and other attorneys emphasized they could not say what plaintiffs would get from a lawsuit against Bio-Lab, and that further action against the facility is up to regulators. The lawyers said they would cooperate with state, local and federal agencies and that advancing litigation would help them investigate whether Bio-Lab has done anything wrong.

“It certainly seems like they have,” Chalos said.

Bio-Lab’s warehouse in Conyers stores trichloroisocyanuric acid (TCCA), a powdered source of chlorine often used to kill bacteria in swimming pools.

As a result of the fire, officials from Rockdale County said chlorine was detected in the air. The Centers for Disease Control and Prevention chlorine gas as toxic and a respiratory irritant capable of causing lung injury or collapse.

In a letter to the US Environmental Protection Agency, elected officials including US Senators Jon Ossoff and Raphael Warnock the EPA to take immediate action to enhance federal oversight of facilities that manufacture or store TCCA.

“We are concerned that facilities like Bio-Lab Conyers, whom manufacture and/or store TCCA are improperly managing these substances,” they wrote in an Oct. 9 letter to the administrator of the EPA. “We urge the EPA to include it on the list of regulated substances under the Risk Management Program.”

Jill R. Shah and Reshmi Basu, with Bloomberg, contributed to this report.