1994-01-05_GENERAL DOCUMENTS - C1981017

• Permit No: C1981017
• IBM Index Class Name: GENERAL DOCUMENTS
• Doc Date: 1/5/1994
• Doc Name: Case No. 92 11658 Response to Colorado Divison of Minerals & Geologys Objection Concerning Debtors a
• Permit Index Doc Type: General Correspondence
• Media Type: D
• Archive: No

action by the operator. The operator then filed a
Chapter 7 bankruptcy, and the state sought an injunction
which would have compelled performance of the consent
order. The Third Circuit held that the remedial action
was being sought to prevent potential future harm. The
fact that the debtor would have to spend money to carry
out the consent order did not preclude the exercise of
the state's regulatory powers. By requiring the debtor
to expend funds to carry out a cleanup order, the Third
Circuit in effect treated the debtor's environmental
obligations as an ongoing administrative expense.
b. Matter of Commonwealth Oil Refining Co. , 805 F.2d
1175 (5th Cir. 1986) , involved an oil refinery which was
governed by the Resource Conservation and Recovery Act of
1976. During the pendency of the debtor's Chapter 11
case, the EPA terminated the refinery's interim permit
and required the debtor to file a closure plan. The
debtor argued that the EPA's actions constituted an
attempt to collect a money judgment that was barred by
the automatic stay. The Fifth Circuit held that forcing
the debtor to spend money fell within the EPA's
regulatory powers and did not represent enforcement of a
money judgment. The Court rejected the debtor's argument
that a showing of "imminent and identifiable harm or
urgent public necessity" should be required before
forcing a debtor to deplete its estate performing
remedial work.
C. In In re Wall Tube and Metal Products Co. , 831 F.2d
118 (6th Cir. 1987 ) , the Sixth Circuit held that
environmental cleanup expenses are necessary "to preserve
the estate in required compliance with state law and to
protect the health and safety of a potentially endangered
public, " and therefore granted such expenses
administrative priority.
9 . Additional authority to support an "ongoing
obligation" is provided by 28 U.S.C. S 959 (b) , which requires
bankruptcy trustees and debtors in possession to "manage and
operate the property in his possession. . . according to the
requirements of the valid laws of the State in which such property
is situated, in the same manner that the owner or possessor thereof
would be bound to do if in possession thereof. "
10. In short, CSCMRA imposes on the Debtor, as mining
permittee, the obligation to reclaim its mine. Case law indicates
that this obligation is best understood as an administrative claim
in the Debtor's bankruptcy, which can be enforced either by the
collection of money or by enforcement orders requiring the Debtor
to expend funds. Consistent with that interpretation, the Board
has entered a post-petition order directing the Debtor to reclaim
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