In an opinion issued on March 24, 2020, the District Court for the District of Delaware held that pre-petition environmental fines accrued by Exide Technologies were dischargeable debts in Exide’s Chapter 11 bankruptcy case and that penalties that Exide accrued during the pendency of its bankruptcy case were not entitled to administrative priority. South Coast Air Quality Management District v. Exide Technologies, Civ. No. 19-891 (D. Del. March 24, 2020). The case suggests that environmental penalties assessed against a corporation, even if premised in part upon false reporting, may be dischargeable in a bankruptcy case and further, that additional penalties not based on cleanup costs during the bankruptcy will not receive special treatment by the courts. Read More »

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In a matter of first impression in Delaware, the Delaware Superior Court recently held that the Department of Natural Resources and Environmental Control (“DNREC”) does not have authority under its cease and desist powers to mandate that an alleged violator take affirmative corrective action. See Del. v. McGinnis Auto & Mobile Home Salvage, LLC, K17A-09-001 JJC (Del. Super. Feb. 21, 2019). The court decided that when DNREC seeks to require a violator to take affirmative action, DNREC must obtain appropriate injunctive relief in Delaware’s Court of Chancery. Read More »

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