THE BANKRUPTCY CLAIM ARISES OUT OF A PREVIOUS CLEAN WATER ACT CASE AGAINST THESE DEFENDANTS WHICH WAS SETTLED IN 1996. THE $2 MILLION PENALTY HAS BEEN PAID. THE AGENCY'S MOST RECENT CONTACT WITH THE DEBTORS WAS A DISPUTE UNDER THE CONSENT DECREE CONCERNING THE PAYMENT OF $25,300 IN STIPULATED PENALTIES. AFTER DISCUSSING THE DISPUTE, EPA DETERMINED THAT THE PENALTIES WERE DUE AS ASSESSED, AND THE PENALTIES WERE PAID ON 12/1/97. EPA BECAME AWARE THAT PEGASUS AND ZORTMAN FILED FOR CHAPTER 11 BANKRUPTCY PROTECTION ON 1/16/98. DOJS APPEARANCE IN THIS MATTER IS NECESSARY TO PROTECT EPA'S INTERESTS IN HAVING ADEQUATE FUNDS AVAILABLE FOR THE COMPANY TO MEET THE REQUIREMENTS OF THE CONSENT DECREE.