Keeping Potentially Responsible Parties (PRPs) Out of Bankruptcy Courts

Abstract

In an era when the cost of compliance with state and federal environmental laws is rapidly rising, sometimes entities, such as operators of waste sites, are unable to pay these and other operating costs and are forced to file for bankruptcy. Citing Midlantic Nat'l Bank v. N.J. Dep't of Envtl. Protection and state environmental laws, bankruptcy trustees may be suing PRPs in bankruptcy courts to share the costs to clean up debtors' waste sites. This article suggests strategies by which PRPs can avoid litigating such lawsuits in the bankruptcy courts and instead resolve them before state and/or federal forums—where they properly belong.