Reviewing Redwater: An Analysis of the U.S. and Canadian Approaches to Environmental Obligations in Bankruptcy
Canadian Business Law Journal (2021)
18 Pages Posted: 28 Apr 2021 Last revised: 12 Aug 2022
Date Written: March 6, 2021
The United States and Canada have both seen significant litigation over the treatment of environmental obligations in bankruptcy proceedings. Both countries also have robust regulatory and statutory frameworks with respect to bankruptcy and environmental law, making the two jurisdictions ripe for comparison. Although the U.S. legal landscape differs somewhat from Canada’s, courts in both countries have struggled to sort out the treatment of environmental obligations in bankruptcy. However, in 2019, the Supreme Court of Canada decided Orphan Well Association v. Grant Thornton Limited, which characterized environmental obligations, not as claims, but as duties owed to the public that could not be compromised in bankruptcy. The purpose of this article is to analyze the impact of the Redwater decision and to highlight issues U.S. scholars and policymakers should watch for as they press for changes to U.S. law. In particular, the article uses three questions to focus its analysis: (1) What is the role of the legislature as compared to the judiciary? (2) What is the role of federal law, as compared to provincial or state law? and (3) What is the role of the public interest?
Keywords: bankruptcy, environmental law, comparative law
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