N.L. loses Abitibi case in Canada's top court

The Supreme Court of Canada says a bankrupt company doesn't have to pay to clean up the environmental mess it left at a mill in Newfoundland and Labrador.

The case concerns Resolute Forest Products, formerly known as AbitibiBowater.

The provincial government expropriated the company's assets after it closed a pulp and paper mill in central Newfoundland in early 2009.

But the province had argued the company should still pay the $100-million cleanup cost.

In a 7-2 decision issued Friday morning, the Supreme Court upheld a prior ruling from a judge in Quebec.

The decision means the Newfoundland and Labrador government must now get in line with other creditors of AbitibiBowater.

The province had argued that its environmental protection cleanup orders were not “claims” under insolvency laws, and thereby fell outside that process.

The company disagreed.

The top court sided with Abitibi.

“Subjecting such orders to the claims process does not extinguish the debtor’s environmental obligations any more than subjecting any creditor’s claim to that process extinguishes the debtor’s obligation to pay a debt,” the majority decision noted.

“It merely ensures that the province’s claim will be paid in accordance with insolvency legislation.”

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