4e Brands Northamerica LLC filed for dissolution last year in the U.S. Bankruptcy Court for the Southern District of Texas, Laredo Division.
According to the Texas Commission on Environmental Quality, when 4e filed for bankruptcy in February 2022 it had 7,402 pallets of inventory that included adulterated hand sanitizer which was recalled by the U.S. Food and Drug Administration “due to the presence of methanol in the product.”
Methanol is a toxic alcohol that is used industrially as a solvent, pesticide, and alternative fuel source.
The 4e pallets were stored in seven warehouses in Laredo, Conroe and Fort Worth, Texas, and in Indianapolis, Indiana.
4e Brands Northamerica filed an “emergency motion” on May 31, 2022, asking the bankruptcy court in Texas to approve a “destruction and recycling proposal” that the company claimed represented “the most cost-effective, efficient and safest” process for destroying its tainted hand sanitizer.
On June 28, 2022, the judge presiding over the bankruptcy proceeding granted 4e’s motion seeking approval to begin destruction of its inventory.
4e Brands solicited and evaluated several proposals from third parties. After what 4e described as an exhaustive search, Latitude Liquids was deemed to be the only company qualified to dispose of that much recalled/unused hand sanitizer. 4e informed the court that company officials selected Latitude Liquids to recycle some of the product and destroy the rest.
Latitude Liquids submitted “the most favorable bid” and would be paid at least $600,000 for the work, court records indicated.
Latitude “provides the services of unpacking and recycling methanol- and ethanol-based hand sanitizer,” 4e told the court. “This solution effectively removes expired and unsellable hand sanitizer from the market through socially responsible methods.” The methanol is “typically utilized in biofuels,” 4e wrote.
Latitude Liquids told a federal court that the products would probably be destroyed in Mexico.
However, through the first week of August 2022, 4e reported it had removed approximately 2,700 pallets (about 36% of all pallets) from warehouses in Indiana and Texas and “sent them for destruction at Latitude’s destruction facility in Oklahoma” – Bordwine storage sites in Grady County.
Additionally, the TCEQ discovered that Latitude developed an outdoor storage/disposal site near Shamrock in the Texas Panhandle near the Oklahoma border.
One investigator reported finding approximately 1,400 shrink-wrapped pallets of hand sanitizer, plus 111 “totes” of hand sanitizer, stored in an unimproved outdoor pit. (A tote is an industrial-size plastic tub in which liquids can be transported.) Subsequently two fires at the site destroyed all but 10 of the pallets of hand sanitizer.
The “debtor’s plan” confirmed by the bankruptcy court established a “compliance deadline” which decreed that 4e Brands’ vendor had to prepare a regulatory compliance plan within 45 days for the “legal storage, transportation, destruction, discarding, disposition, or recycling” that the TCEQ and the U.S. Environmental Protection Agency did not find objectionable.
Latitude Liquids – which was founded less than a year and a half ago and whose CEO is a professional chef – failed to meet that requirement.
4e Brands pivots to another vendor
“After it became clear” that Latitude Liquids “could not meet the compliance deadline,” 4e pivoted to another vendor: Clean Management Environmental Group founded 30 years ago and based in Walterboro, South Carolina. The company claims it has expanded its service area “nationwide into all 50 states.”
The TCEQ discovered on Feb. 22, 2023, that 4e had contracted with the new vendor. The Texas agency also was told by a confidential informant that Clean Management hired a trucking company to transport 4e’s contaminated hand sanitizer from Laredo, Texas, to a recycling facility in Indiana.
That company is Glycerin Traders in LaPorte, Indiana. On its website, Glycerin Traders says it specializes in the trading of various grades of glycerin, mixed alcohol, vegetable and animal fat, multiple types of feed ingredients “and most other recyclable, organic ingredients.”
Cement manufacturers will employ the hand sanitizer as a solvent to wash their production equipment, the U.S. Bankruptcy Court in Laredo was told.