The Supreme Court of Canada ("SCC") will once again weigh in on the interplay of bankruptcy and environmental protection. On Nov. 9, the Alberta Energy Regulator ("AER") was granted leave to appeal a ruling of the Alberta Court of Appeal that allowed a bankrupt oil company, Redwater Energy Corporation, to sell off about 20 producing oil wells for the benefit of secured creditors, while disclaiming interests in about 100 abandoned wells which were subject to cleanup orders from the AER. The ruling effectively provided the assets of the company to secured creditors free of any liabilities for environmental cleanup of the abandoned wells.
Clerical errors are an unfortunate fact of business life. When they happen, they are typically reversible, with the appropriate apologies. But when the payout of creditor claims is involved, that may not always be the case.