A hazardous chemical spill has disrupted operations at Gilman’s Cleaners, according to court records, and the dry-cleaner blames the previous owner of the Middletown business for allegedly failing to fix the hazard.
Hintons5 LLC, the new owner, sued Dlugatz Clams LLC on June 2 in U.S. Bankruptcy Court, Poughkeepsie, for breach of contract.
Dlugatz Clams failed to remediate the spill, according to the complaint, replace an underground tank or cover Hintons5 for ongoing losses.
Daniel Hinton of Roaring Brook, Pennsylvania, owns Hintons5. Martin Dlugatz of Middletown owns Dlugatz Clams.
Hinton bought Gilman’s in 2018 and mortgaged the property at 40 Dolson Ave. to Dlugatz Clams for a $629,853 loan.
Dlugatz disclosed that a pipe attached to a 500-gallon underground fiberglass tank had ruptured in 2016, according to the complaint, and hazardous dry-cleaning solvent had leaked into the soil.
The Gilman’s deal included an agreement that required Dlugatz Clams to cover Hintons5 for up to $250,000, the complaint states, for losses arising from the 2016 spill.
Fourteen months after the deal was struck, the underground tank failed again and hazardous solvent leaked into the soil, according to the lawsuit.
Hintons5 claims that Dlugatz Clams did not clean up the first spill or did not buy a new fiberglass tank, and instead made a temporary repair.
Gilman’s had to stop providing dry-cleaning services and lost a “significant number of customers.”
Hintons5 defaulted on the mortgage, and Dlugatz Clams filed a foreclosure action in Orange County Supreme Court, demanding $636,652 from Hintons5 and Hinton personally.
Last year, Hintons5 petitioned U.S. Bankruptcy Court for Chapter 11 protection. The dry-cleaner declared $600,050 in assets – consisting mostly of the value of the property – and $722,436 in liabilities, including a $615,000 debt to Dlugatz Clams and nearly $83,000 in unpaid property taxes.
Hinton did not mention the second spill as an explanation for the bankruptcy, in an affidavit filed with the petition. But the petition cites the chemical spill as in need of immediate attention and states that the previous owner had agreed to take care of the problem.
Gilman’s also operates a dry-cleaning store in Hawley, Pennsylvania, 50 miles from Middletown, that is not mentioned in the bankruptcy case. Gilman’s website indicates that the Middletown store is still in business.
Hintons5 is demanding unspecified damages from Dlugatz Clams. It is represented by Poughkeepsie attorney Thomas J. Cummings.