Did Sterigenics Preemptively Pay Out Investors To Drain Legal Settlement Funds?

sterigenics law suit
A protester holds a sign warning against the potential harms of ethylene oxide in Springfield last year. A lawsuit against Sterigenics, which uses the chemical to sterilize medical equipment, claims the company redirected $1.3 billion in an effort to reduce their potential payouts. Courtesy of Stop EtO
sterigenics law suit
A protester holds a sign warning against the potential harms of ethylene oxide in Springfield last year. A lawsuit against Sterigenics, which uses the chemical to sterilize medical equipment, claims the company redirected $1.3 billion in an effort to reduce their potential payouts. Courtesy of Stop EtO

Did Sterigenics Preemptively Pay Out Investors To Drain Legal Settlement Funds?

Did a west suburban plant accused of spewing a cancer-causing chemical preemptively try to reduce the cost of any potential legal settlements?

The Illinois Environmental Protection Agency shut down the Sterigenics plant in Willowbrook last year after discovering high levels of ethylene oxide near the facility. Now, the lawyers suing Sterigenics claim the company not only made people sick, but it redirected $1.3 billion in an effort to reduce their potential payouts.

“It is glaringly apparent to me that once they were caught with their hands in the ethylene oxide jar, they took measures to mitigate their financial loss,” said plaintiff Jeanne Hochhalter, who blames Sterigenics for her cancer. “But they never made efforts to mitigate the amount of ethylene oxide they were pumping into our neighborhoods.”

The latest allegations against the controversial company that sterilizes medical equipment was revealed Friday in an amended lawsuit. It claims Sterigenics’ redistribution of wealth was a shrewd tactic to avoid paying out in future civil suits.

Anthony Romanucci, one of the lawyers suing Sterigenics, said the company’s financial strategy since 2016 has been to enrich the owners and limit legal settlements. Romanucci pointed to a series of multimillion dollar payouts to owners and a maneuver where the company pledged assets to banks.

“[They had] a methodical and systematic approach to draining money out of the company to make themselves appear poor,” Romanucci said.

There are currently 75 pending civil lawsuits in Cook County accusing the company of poisoning communities around the now-closed Willowbrook plant. Plaintiffs say the chemical Sterigenics used to sterilize medical equipment caused miscarriages and deadly cancers.

Colleen Haller, who spoke Monday at a news conference, said ethylene oxide caused her husband’s stomach cancer.

“For 18 months I had to watch my very active, healthy husband die,” she said. “Eventually he just couldn’t just hold on anymore and he starved to death — from cancer.”

Sterigenics legal announcement
Attorney Anthony Romanucci speaks Monday in Chicago about an amended class-action lawsuit that claims Stergenics moved $1.3 billion to limit legal payouts. Vivian McCall / WBEZ

A spokesperson for Sterigenics could not be reached for comment on Monday, but in the past the company has said ethylene oxide is the only federally approved process to sterilize medical equipment.

Last fall, the company decided not to reopen the Willowbrook facility, blaming “inaccurate and unfounded claims regarding Sterigenics and the unstable legislative and regulatory landscape in Illinois.”

Lawyers detail how money was allegedly hidden

Lawyers representing the public said Monday that chemical companies have known since the mid-1980s that ethylene oxide is dangerous.

Sterigenics began paying out its venture capital firms ahead of a damning December 2016 federal report that showed ethylene oxide was 30 times more carcinogenic than government regulators had thought, according to the amended lawsuit.

The company made five payments of $95-$340 million to these investors, lawyers said. These payments came before and after cancer-stricken plaintiffs began suing the company.

The lawyers claim Sterigenics also took out bank loans that required the company to pledge assets to the banks, which would keep money away from those who would win any future lawsuit. Attorney Shawn Collins, who represents some of the plaintiffs, said even if they win, the banks are first in line.

The case is scheduled to be back in court Friday.