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Information Notice No. 93-100: Reporting Requirements for Bankruptcy
UNITED STATES NUCLEAR REGULATORY COMMISSION OFFICE OF NUCLEAR MATERIAL SAFETY AND SAFEGUARDS WASHINGTON, D.C. 20555 December 22, 1993 NRC INFORMATION NOTICE 93-100: REPORTING REQUIREMENTS FOR BANKRUPTCY Addressees All U.S. Nuclear Regulatory Commission licensees. Purpose NRC is issuing this information notice to alert addressees to the failure of some licensees to notify NRC when they filed for bankruptcy. It is expected that recipients will review the information for applicability to their facilities and consider actions, as appropriate, to avoid similar problems. However, suggestions contained in this information notice are not new NRC requirements; therefore, no specific action nor written response is required. Description of Circumstances On August 6, 1993, management at an NRC-licensed hospital announced that it had filed for bankruptcy and would be discontinuing operations at the close of business that day. The announcement came to the attention of NRC regional staff who contacted the hospital. Two NRC inspectors traveled to the facility to observe the disposition of licensed material. All radioactive material was transferred to another NRC-licensed hospital, except for radioactive waste stored at the hospital for decay. A former supervisor agreed to return to the hospital at the appropriate time to properly dispose of the waste. NRC staff coordinated with the court-appointed trustee before the hospital's license was terminated. Regulations in 10 CFR 30.34(h), 40.41(f), 50.54(cc), 70.32(a)(9), and 72.44(b)(6) require each licensee to notify the appropriate NRC Regional Administrator, in writing, immediately following the filing of a voluntary or involuntary petition for bankruptcy under any chapter of Title 11 (Bankruptcy) of the United States Code. In the incident described above, the radioactive material was controlled, but there have been cases where unlicensed trustees and creditors have taken possession of items without knowing that they contained radioactive material or being aware of the safety and regulatory requirements associated with the material. These parties typically requested assistance after they discovered that they possessed radioactive material. To date, no serious injuries have resulted from these incidents. Licensees who failed to notify NRC claimed that they were unaware of the requirement or overlooked the requirement because of other demands created by the bankruptcy. 9312160093. IN 93-100 December 22, 1993 Page 2 of 2 Discussion: The purpose of the bankruptcy notification requirement is to allow NRC to verify the safe disposition of radioactive material possessed by the bankrupt licensee. Trustees or creditors taking possession of radioactive material can create a substantial safety hazard if the material is handled without the proper safety precautions, or transferred to unauthorized recipients. NRC regulations require each licensee to notify NRC of a petition for bankruptcy filed by or against (1) the licensee, (2) an entity controlling the licensee or listing the licensee/license as property of an estate, or (3) an affiliate of the licensee. The terms "affiliate" and "entity" are defined in 11 U.S.C. 101(2) and 101(14), respectively. The notification must indicate the bankruptcy court in which the petition is filed, and the date of the filing. In addition to the potential safety hazards, failure to notify NRC and maintain control of licensed material could lead to enforcement actions at a time when a licensee is already experiencing financial difficulty. Licensees may wish to share this information notice with financial or legal staff in their organization. This information notice requires no specific action nor written response. If you have any questions about the information in this notice, please contact the technical contact listed below, or the appropriate regional office. /s/'d by Carl J. Paperiello Carl J. Paperiello, Director Division of Industrial and Medical Nuclear Safety Office of Nuclear Material Safety and Safeguards Technical contact: Kevin M. Ramsey, NMSS (301) 504-2534 Attachments: 1. List of Recently Issued NMSS Information Notices 2. List of Recently Issued NRC Information Notices .
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