ENDICOTT -- Negotiations to settle more than $100 million in health and property claims related to pollution from the former IBM factory have failed, leaving attorneys representing nearly 1,000 area clients planning to file a lawsuit against the company in January.

IBM's offer of $3 million to settle all claims, with a release from further action, fell well short of expectations, according to a letter to clients dated Nov. 27 from Levene Gouldin & Thompson, a Vestal law firm.

The plaintiffs will press forward with litigation "based on these very disappointing developments, especially in light of the more than three years we had spent meeting with IBM in what we always assumed was good faith bargaining," the letter states.

A group of lawyers representing the plaintiffs are scheduled to meet in Philadelphia today to plan the next step.

The claims stem from a subterranean plume of trichloroethylene (TCE) found in 2003 to be creating vapors wafting into homes and buildings near the plant on North Street. Exposure to the chemical is linked to illnesses ranging from cancer to brain damage, but the amount posing calculable risks is debatable.

The state Department of Health has documented a significant elevation of certain cancers and birth defects in areas affected by pollution south and southwest of the plant. Health officials have been unable to pinpoint a cause for the illnesses.

Lawyers representing plaintiffs began talks with IBM in 2004 with the expectation of reaching a settlement.

According to the Nov. 27 letter, IBM's $3 million offer did not include personal injury claims, which IBM believes are without merit. But the offer would require a provision that would release the company from those claims, anyway.

"We're disappointed," said Stephen G. Schwarz, a lawyer with the Rochester firm of Faraci & Lange, part of the legal team. "We are surprised it went as long as it did," considering the sides were never close to an agreement.

IBM's final offer was given after changes in the company's management created "a new attitude ... concerning claims arising from chemical contamination, and the type of litigation through which contamination claims are asserted and resolved," according to the letter. It was signed by attorney Philip Johnson, writing on behalf of a legal team including five firms from New York, Pennsylvania and New Jersey.

IBM representatives could not be reached Wednesday night. In the past, the company has declined to comment on litigation as a matter of policy.

While stakeholders in the case will have to wait for another chapter to unfold in the courtroom, a process that could take months or years, a trial would likely uncover new information about the origin and history of the pollution that might never come to light in a settlement.

Despite extracting more than 70,000 gallons of TCE and other solvents from the ground -- the total amount spilled remains unknown as cleanup operations continue around the clock -- IBM representatives have said they have no records of a TCE spill.

"Once litigations begins, we will have the tools to obtain information that we don't have now about what IBM knew and when," Schwarz said.

IBM may agree to a settlement favorable to plaintiffs after a trial date is set, according to the letter from Johnson.

"We still genuinely believe that, although IBM has not negotiated seriously yet, the company's approach may change," it stated.

Regardless, Schwarz said, attorneys for the plaintiffs are ready to see through a long, expensive trial against a company with deep pockets and extensive brain trust.

"It's always tough going against a large corporation," he said. "We have a large number of very skilled attorneys and a large number of law firms vested in it."