Court ruling on UK insolvency case may weaken environmental protection
A recent Court of Appeal decision has given insolvency practitioners the go-ahead to disclaim waste management licenses held by companies in compulsory liquidation.
In the case of Official Receiver as Liquidator of Celtic Extraction Ltd & Bluestone Chemicals, the Court of Appeal unanimously overturned an earlier decision that while waste management licenses were considered “property” under the Insolvency Act 1986, they could not be disclaimed because environmental protection should prevail even though it might interfere with the winding up of a company.
The Court of Appeal disagreed, stating that if Parliament had wished to exclude the operation of the Insolvency Act in this respect, it would have specifically stated so in the Environmental Protection Act 1990.
Paul Sheridan, environment law partner at Cameron McKenna, said, “Landfill operators may be worried that this decision could lead to distortion of trade if the decision makes it easier for cowboy operators to flourish. No doubt this will also result in the Environment Agency taking a closer look at the financial provision aspects of waste management licensing.”
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