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In re In re Brio Ref., Inc.

ELR Citation: 18 ELR 21482
Nos. No. 3-86-2891-G, 86 Bankr. 487/27 ERC 1900/(N.D. Tex., 05/25/1988)

The court permits a trustee in bankruptcy to abandon property later discovered to be contaminated with hazardous waste. The bankruptcy court had approved the abandonment pursuant to 11 U.S.C. §554 in April 1983; in October 1984 the Environmental Protection Agency proposed to list the property on the National Priorities List. The potentially liable parties under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), who have incurred and will continue to incur CERCLA response costs connected with cleanup of the site, challenged the bankruptcy court's decision. The district court holds that abandonment was proper under the Supreme Court's decision in Midlantic National Bank v. New Jersey Department of Environmental Protection, 16 ELR 20278, since the hazardous nature of the property was not discovered until after abandonment, and the abandonment did not contravene any federal or state laws designed to protect the environment. The court also holds that the abandonment is irrevocable, even though it occurred before the intervention of third-party rights. Limited exceptions to the irrevocability of abandonment under §554 are inapplicable, since they apply only where the trustee was unaware of the subject property's existence.

Counsel for Appellant
Robert M. Doby, Mark J. Petrocchi, Henry W. Simon Jr.
Simon, Anisman, Doby, Wilson & Skillern
400 Professional Bldg., 303 W. 10th, P.O. Box 17047, Fort Worth TX 76102-7071
(817) 335-6133

Counsel for Trustee
J. Maxwell Tucker
Winstead, McGuire, Sechrest & Minick
5400 Renaissance Tower, 1201 Elm St., Dallas TX 75270
(214) 742-1700