Environmental Obligations in Bankruptcy: Reconciling the Conflicting Goals of Bankruptcy and Environmental Laws

Addressing Pre- vs. Post-Petition Claims, Enforcement Actions, Statutory Super Liens, Asset Sales, Abandonment and More

Recording of a 90-minute CLE webinar with Q&A


Conducted on Tuesday, March 21, 2017

Recorded event now available

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Program Materials

This CLE webinar will investigate the conflicts that exist between the Bankruptcy Code and state and federal environmental statutes and provide bankruptcy counsel with an understanding of how these issues are resolved in bankruptcy proceedings. The panel will review relevant court decisions and why some environmental claims receive special treatment in bankruptcy.

Description

The Bankruptcy Code frequently conflicts with state and federal environmental laws in the administration of a bankruptcy case. The goal in bankruptcy proceedings is to identify the assets and liabilities of the debtor and either liquidate or reorganize the debtor, discharging or paying outstanding claims within a limited time period.

In contrast, environmental laws require remediation of environmental contamination, often over an extended period of time and with ultimate remediation costs not yet determined, with the cost and responsibility of cleanup allocated among potentially-responsible parties (PRPs).

PRP claims and government enforcement actions receive varied treatment in bankruptcy. Some claims may be discharged, while some may survive depending on when the claim arises, the existence of statutory or super liens, public health, the status of ongoing remediation, and other considerations.

Environmental obligations also impact the ability of the debtor to conduct a 363 asset sale or abandon property. Counsel must understand how various environmental claims are treated in bankruptcy.

Listen as our authoritative panel examines the conflicts between environmental law and bankruptcy law and how various types of environmental claims are treated in bankruptcy. The panel will review court decisions and provide analysis of relevant Bankruptcy Code provisions to explain how cost recovery, contribution, remediation and other actions are evaluated in bankruptcy. The panel will also discuss pre-petition vs. post-petition claims, enforcement actions which can trump the automatic stay, the effect of super lien statutes, environmental reserves, and other ways that environmental claims can uniquely impact bankruptcy proceedings.

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Outline

  1. Dischargeability of environmental claims under Chapter 11
  2. Exceptions to discharge
    1. Performance of obligations to prevent harm
    2. Claims for statutory obligations arising post-petition
  3. Bankruptcy Court jurisdiction over environmental claims
  4. Exceptions to automatic stay relating to governnmental agencies
    1. Creating or perfecting environmental lien post-petition
    2. Enforcement actions under CERCLA and other statutes
  5. Standing of governmental agencies with environmental claims to influence the outcome of the bankruptcy case
  6. Treatment of post-petition environmental cleanup as an administrative expense
  7. Addressing contingent environmental claims
  8. Disposition of contaminated assets
    1. Abandonment
    2. Environmental reserves and trusts

Benefits

The panel will review these and other key issues:

  • When are environmental claims dischargeable in bankruptcy, and what are the exceptions?
  • What kinds of governmental actions are unaffected by the automatic stay?
  • How are contingent environmental claims treated in bankruptcy, and which claims are deemed to be post-petition?
  • Can the bankrupt debtor sell or abandon contaminated assets?
  • How can governmental agencies with environmental claims influence the outcome of the bankruptcy case?

Faculty

Martin T. Booher
Martin T. Booher

Partner
BakerHostetler

Mr. Booher practices within the oil and gas, renewable and clean energy, utilities, power, and pipeline industries. He...  |  Read More

Green, Elizabeth
Elizabeth A. Green

Partner
BakerHostetler

Ms. Green practices primarily in the areas of bankruptcy and creditors' rights and is the leader of the Firm's...  |  Read More

Lance Gurley
Lance Gurley

Managing Director
Blackhill Partners

Mr. Gurley advises clients on mergers and acquisitions, complex restructurings and private placements of debt and...  |  Read More

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