On Feb. 22, 2022, when 4e Brands Northamerica LLC filed a bankruptcy petition for dissolution, it had 7,402 pallets of inventory that included adulterated Blumen 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, records reflect.
4e Brands Northamerica filed an “emergency motion” on May 31, 2022, asking the U.S. Bankruptcy Court for the Southern District of Texas, Laredo Division, 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.
A month later the judge presiding over the bankruptcy proceeding granted 4e’s motion seeking approval to begin destruction of its inventory.
4e Brands, whose principal place of business was in San Antonio, Texas, told the bankruptcy judge it 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.
Latitude Liquids was founded less than three years ago, and its two principal officers are a professional chef and an individual who describes himself as “a serial entrepreneur” and a “professional something.”
4e told the court that company officials selected Latitude Liquids to recycle some of the product and destroy the rest. Latitude Liquids proposed “a destruction and recycling proposal that represents the most cost-effective, efficient and safest destruction process available,” the court was told.
Latitude submitted “the most favorable bid” and would be paid at least $600,000 for the work, court records indicated. “Most other quotes were nearly 10 times as much as the Latitude quote,” 4e informed the bankruptcy judge. Southwest Ledger was unable to find a bid sheet among the numerous records filed in 4e’s bankruptcy case.
Latitude “provides the services of unpacking and recycling methanoland 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 the federal court that 4e’s products would probably be destroyed in Mexico.
Through the first week of August 2022, however, 4e reported it had removed approximately 2,700 pallets (36% of all pallets) from warehouses in Indiana and Texas and “sent them for destruction at Latitude’s destruction facility in Oklahoma” – which were three storage sites in Grady County owned or leased by Chickasha businessman and landlord Brannan Bordwine.
Five fires erupted at those sites between August 2022 and July 2023. Most, if not all, of the product was incinerated in those fires.
Sanitizer stored in Texas also destroyed by fire Additionally, the Texas Commission on Environmental Quality (TCEQ) discovered that Latitude developed an unapproved outdoor storage/disposal site outside Shamrock in Wheeler County – at the eastern edge of the Texas Panhandle, abutting Beckham and Rogers Mills counties in Oklahoma.
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 TCEQ issued a citation claiming that between Oct. 7, 2022, and Feb. 28, 2023, Latitude Liquids “stored and/or disposed of approximately 174,750 gallons of expired ethanol-based or recalled methanol-based hand sanitizer” at the Shamrock site “without authorization.”
TCEQ assessed a $31,500 administrative penalty against Latitude for the infraction. The amount was reduced to $25,200 after the company immediately paid $700 of the penalty and another $6,300 was deferred “upon the Respondent’s timely and satisfactory compliance with all the terms” of a consent order. The $24,500 balance is to be paid in 35 monthly installments of $700 each, the order shows.
The consent order was signed on March 3, 2024, by Michael McGovern, executive director of operations for Latitude Liquids LLC.
A warranty deed from Wheeler County, Texas, showed that on Sept. 21, 2022, George W. Faulkner of Judson, Texas, executor of the estate of the late Nona Ann Faulkner, deeded 320.5 acres near Shamrock to Michael McGovern Jr. of Rogers, Arkansas, in Benton County. The market value of the half-section at that time was $448,710, according to the Wheeler County Appraisal District. 4e Brands pivots to another vendor The “debtor’s plan” confirmed by the bankruptcy court established a 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 was acceptable to the TCEQ and the U.S. Environmental Protection Agency.
Latitude Liquids failed to meet that requirement.
“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 a warehouse in 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.