Similar versions of this article were published in The Daily Independent, Ridgecrest (Aug. 27, 2026), The Bakersfield Californian (Aug. 27, 2026), and Tehachapi News (Aug. 27, 2026).
TRONA — A federal bankruptcy judge in Delaware said in court Wednesday (Aug. 26) that he will reject the California Air Resources Board’s bid to ensure a future buyer of Searles Valley Minerals’ Trona operations would inherit a $76.3 million environmental obligation — a ruling that clears a legal hurdle as the company works to sell what remains of its mining, water and rail assets.
“I will overrule the objection,” Judge Brendan L. Shannon said from the bench, addressing CARB’s argument that the debt should survive any sale of the company’s assets under Section 363 of the U.S. Bankruptcy Code.
The judge’s statement related to CARB’s objection to sale of assets of the three companies: SVM, Trona Railway Company LLC and Searles Domestic Water Company, LLC.
James J. Mazza Jr. of Searles’ bankruptcy counsel, Skadden, Arps, Slate, Meagher & Flom LLP, told the court Wednesday that negotiations are continuing with bidders regarding the sale of the rest of the assets of the debtors on a going concern basis.
“While we have not yet reached a definitive agreement to present to the court, parties are keenly focused on getting a deal done,” Mazza said. “And if and when we get to a deal, any deal will most likely involve support from the parent here, KHI, which is ultimately owned by Nirma Limited back in India,” he added. KHI is Karnavati Holdings, Inc., SVM’s parent company.
Leading in to discussion of what Mazza said was “the main event” Wednesday — a motion and objection to the sale of company assets from the California Air Resources Board — Mazza said “proverbial lines in the sand” were being drawn in the town of Trona as the bankruptcy proceedings play out.
Michael Dorsi, deputy attorney general, was in court Wednesday for CARB. He and others responded to questions from Shannon concerning fine points of the law and how California’s cap-and-invest program works.
Responding on Friday, Aug. 21, to CARB’s motion to saddle a future buyer with the environmental debt, the company’s court filing said that “if CARB were to prevail, the Debtors would be forced to liquidate, lay off more than 200 employees, and discontinue operations at their water treatment facility that provides potable water to the residents of Trona, California. In that scenario, there is little doubt CARB would receive nothing at all.”
Continuing, the Searles filing said: “No going concern bidder for the Debtors’ assets is willing to assume the CARB obligations and understandably will require a court order clearly providing that it would not be held liable as a successor for the Debtor’s prepetition CARB obligations that might come due post-closing.”
In a statement made in court Wednesday, Mazza said Tata won Tuesday’s auction with a bid of $21.5 million and that American Soda is the backup bidder at $21.25 million.
Tata, one of the world’s leading producers of soda ash, operates a large mining and manufacturing facility in Green River, Wyo. According to a news release from Searles in June, the company agreed to provide SVM an unsecured, interest-free liquidity advance of up to $20 million to keep the Trona soda ash supply chain running.
What’s next?
Searles’ stated goal in the Chapter 11 proceeding remains finding a buyer for the entire Trona operation — Searles Valley Minerals and its affiliates, Trona Railway Company LLC and Searles Domestic Water Company LLC. With the soda ash contracts now sold to Tata, that search continues for the rest of the company’s assets, including the mining operation, the railway and the water utility, on a going-concern basis.
No auction date has been set for that sale. Several other matters also remain unresolved, including a limited objection to the sale filed by the Official Committee of Unsecured Creditors, and cure-payment disputes from Union Pacific Railroad and Progress Rail Leasing Corporation tied to contracts the company hopes to assign to a future buyer.
More information
Case information is online at cases.stretto.com/SVM.
CLAUDIA ELLIOTT is the founder and editor of The Mojave Beat.