How Bankruptcy Can End Environmental Cleanup Obligations

Law360, New York (January 17, 2013, 1:39 PM EST) -- Whenever buyers and sellers negotiate environmental cleanup obligations under a real estate purchase agreement, they must consider what will happen if the party bearing the cleanup obligations files for bankruptcy.  This article examines the practical implications for such buyers and sellers following a recent federal district court decision that held that a debtor’s bankruptcy ended its contractual obligation to clean up environmental contamination, the buyer’s past response costs could be treated as a general unsecured claim (meaning being paid pennies on the dollar with other unsecured...
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