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Insolvency and energy insights: The Redwater decision

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An Alberta court has held that provisions of the Bankruptcy and Insolvency Act allowing a trustee or receiver to disclaim real property without assuming environmental  liabilities in relation thereto renders inoperable provincial legislation that would otherwise seek to impose such liability on the trustee or receiver. The Court further held that a provincial regulatory body could not use its regulatory powers to block the sale of assets in insolvency proceedings. Although this case dealt with provincial legislation in the energy sector, the principles of paramountcy articulated therein would apply equally in the mining space.

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