ELR Citation: ELR 20326
No(s). 90-12157-7 (Bankr. W.D. Wis. Sep 3, 1993)

The court holds that a bankruptcy trustee is entitled to abandon its contaminated property without first expending the assets of the estate to clean up the property and without granting the Wisconsin Department of Natural Resources a priority lien on the property for future cleanup costs. The court first holds unripe the state's motion for administrative expense priority for cleanup costs that it had not yet incurred at environmentally contaminated real property owned by the Chapter 7 debtor. To allow administrative expense status for cleanup costs that have not yet been incurred would be tantamount to issuing an advisory opinion. The court next holds that the trustee may abandon the property. The cleanup costs do not qualify for administrative expense priority because a trustee will not be required to exhaust the bankruptcy estate in an attempt to cover the costs of remedying, or partially remedying, the environmental contamination where it is likely the cleanup costs will exceed the contingent sale price of the property and there is no evidence that the property poses an imminent danger to the environment. Moreover, Bankruptcy Code §503 mandates that such expenses be granted priority only where necessary to preserve the estate, however, the future cleanup costs that the state would allegedly incur at this property are unnecessary to preserve the debtor's estate. Finally, the court holds that the state is not entitled to a lien in the property as a condition of abandonment. That the state had not attempted to remedy contamination evidenced the lack of danger, and absent a showing by the state of imminent danger, the Bankruptcy Code does not authorize the court to fashion its own remedy to address the contamination.

Counsel for Petitioner
Janette K. Brimmer, Ass't Attorney General
Attorney General's Office
114 E. State Capitol, P.O. Box 7857, Madison WI 53707
(608) 266-1221

Counsel for Respondent
Randi L. Osberg
Garvey, Anderson, Johnson, Gabler & Geraci
402 W. Graham Ave., P.O. Box 187, Eau Claire WI 54702
(715) 834-3425