HILL PETROLEUM CO. IS THE OWNER OF 2 REFINERIES IN LOUISIANA WHICH REPORTED A TOTAL OF 8 LEAD PHASEDOWN VIOL'S BEGINNING 1981 AND CONTINUING THROUGH 1983. THE ACTION WAS BROUGHT PURSUANT TO SECT 211(D) OF THE CLEAN AIR ACT, WHICH FIXES A MANDATORY PENALTY FOR EVERY DAY OF VIOLATION. THE REPORTING PERIODS OF VIOLATION CONTAINED 762 DAYS; THERE- FORE EPA IS SEEKING THE STATUTORY PENALTY OF $7.62 MILLION. PRIOR TO REFERRING THE ACTION TO DOJ, EPA ATTEMPTED TO SETTLE WITH HILL. DURING THE COURSE OF NEGOTIATIONS, HILL FILED CH.11 BANKRUPTCY IN THE WESTERN DISTRICT OF LOUISIANA. EPA, IN CONSEQUENCE, HAS FILED A PROOF OF CLAIM IN THE BANKRUPTCY CASE, AND IS AT THE SAME TIME SEEKING TO EST- ABLISH LIABILITY FOR THE VIOLATIONS AND THE AMOUNT OF THE PENALTY IN THE DISTRICT COURT FOR THE WESTERN DISTRICT OF LOUISIANA. A PLAN WAS CONFIRMED IN THE CHAPTER 11 ON JUNE 19, 1985, UNDER WHICH EPA WILL RECEIVE CASH AND SHARES OF STOCK IN A NEWLY REORGANIZED HILL PETROLEUM COMPANY.