Canadian Lender Defeats Environmental Claim

One of the most vexing commercial insolvency issues is the competition between creditors with security on environmentally troubled property and environmental authorities looking for deep pockets to fix the environmental problems. From a creditor's point of view, a recent Alberta decision is a potential respite from environmental obligations being imposed on creditors of the owners of environmentally troubled property. 

Most countries have environmental protection legislation which follows a predictable pattern of seeking to place the costs of dealing with environmental problems on the property owner or creditors who have some involvement such as possession or direct management of the property. In some cases, the creditors may have no knowledge that anything was wrong with the property but regulators may be looking for deep pockets. The issue is whether the creditors of the owner of an environmentally impacted property are, or should be, responsible for cleaning