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United States v. Nicolet, Inc.

ELR Citation: 18 ELR 20845
Nos. No. 85-3060, 81 Bankr. 310/27 ERC 1078/(E.D. Pa., 01/12/1988) Automatic bankruptcy stay denied

The court holds the automatic stay provision of the Bankruptcy Code, 11 U.S.C. §362(a), does not apply to a federal Comprehensive Environmental Response, Compensation, and Liability Act cost recovery action brought by the United States government. An automatic stay does not apply when one of the government regulatory power exceptions listed in §362(b) is present, and environmental protection falls within the scope of the government's regulatory power. The court then holds that a government-funded cleanup followed by a cost reimbursement action against the responsible parties is an action to enforce the governmental unit's police or regulatory power, within the meaning of 11 U.S.C. §362(b)(4) and (5). Thus, a governmental cost recovery action is exempt from the automatic stay provision.

[Earlier decisions from this litigation appear at 17 ELR 21085, 21088, and 21091.]

Counsel for Plaintiff
Edward S. G. Dennis, U.S. Attorney; Virginia Gibson-Mason, Ass't U.S. Attorney
3310 U.S. Cthse., Independence Mall West, 601 Market St., Philadelphia PA 19106
(215) 597-2556

Counsel for Defendant
Joseph G. Manta
Manta & Welge
1515 Market St., Suite 1818, Philadelphia PA 19102
(215) 564-4388