The insolvent metal processing company, Timminco, is attempting a new
twist to "cleanse" creditors of environmental claims
through insolvency law. They have
applied to the Commercial List for permission to sell their
valueless contaminated sites, for virtually nothing, to new
subsidiaries, which will then immediately declare bankruptcy. The
contaminated assets will thereby be transferred to the provincial
government, freeing up more money for other creditors. Meanwhile,
the environmental work urgently needed at the contaminated sites
will be abandoned, unless taken over by the province.Among other
things, the contaminated sites pose a threat to a nearby creek and
the Ottawa River:
"The mining activities left a quarry which fills naturally
with water whose alkalinity is elevated due to leaching from the
exposed rock and from the nearby tailings pile – pending
development of a means of mitigating the run-off issue, Timminco
has been pumping water from the quarry and treating it to reduce
its alkalinity prior to its discharge into a nearby
creek which flows into the Ottawa River."
This is yet another of the flood of cases in which leveraged
buyouts, lax environmental regulation (especially inadequate
financial assurance) and the financial crisis have combined to
create short term profits and long term environmental harm as
contaminated sites across the country are abandoned. Insolvency
cases always involve allocating pain to those who are more or less
innocent, and frequently involve leaving environmental work undone,
given the priorities set by the federal government for
insolvencies. I admit, though, that the Timminco manoeuvre seems
particularly cold blooded. The Ministry of the Environment must be
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