OTTAWA – The Supreme Court of Canada says bankruptcy trustee in Alberta bankruptcy can not simply go from unproductive wells to agricultural land without cleanup.
The 5-2 Supreme Court verdict annulled the Alberta Court's verdict confirming the 2016 ruling in Queen Elizabeth's Court that effectively enabled the bankruptcy firm to terminate the relationship with unprofitable and unused wells when the assets of the company were sold by creditors.
The Supreme Court today ruled that bankruptcy trustee, Grant Thornton Ltd., can not waive its obligations at the end of life to make the abandoned wells ecologically safe.
The decision turned the conflict between federal bankruptcy law and provincial jurisdiction over the environment and the energy sector.
Albertin's provincial energy regulator commissioned Redwater Energy Corporation's trustee to meet end-of-life requirements in order for the abandoned property to become environmentally safe.
The bankruptcy trustee of the company did not adhere to it and filed its counterclaim, which included the challenge of regulatory action, referring to the bankruptcy law of the federal bankruptcy law.
Since the case came before the court, it was estimated that 1,800 boreholes representing more than $ 100 million in abandoned liabilities.
The Albert Energy Regulator and Orphan Well, which funds the industry and clean boreholes that have remained undone, complained about this decision to the High Court.
The group supported by thousands of farmers also wanted to see the High Court overturn the decision.
The Surface Rights Association intervened in case it believes the land owner's rights are neglected in the case.