Federal Court of Appeals Finds Environmental Cleanup Compliance Not Dischargeable in Bankruptcy

An Order requiring a company to clean up contamination under the provisions of the federal Resource Conservation and Recovery Act (RCRA) is not dischargeable in bankruptcy, the Seventh U.S. Circuit Court of Appeals ruled recently. The bankruptcy code only authorizes discharge of claims that can be paid in money. RCRA does not authorize the government to collect money from a company, but only authorizes it to force the company to complete cleanup of contamination at its facility. Thus, an obligation to clean up contamination is not dischargeable in bankruptcy. For further information, contact Stephen E. O’Day, Phillip Hoover or Brian Hall.

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