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What Happens When a Wetland Mitigation Bank Goes Bankrupt?

September 2005

Citation: 35 ELR 10590

Issue: 9

Author: Royal C. Gardner and Theresa J. Pulley Radwan

Editors' Summary: The wetland mitigation banking business has grown dramatically in the last decade. But as is true with any business, mitigation banks are subject to risk, including the risk of going bankrupt. This Article looks at how bankruptcy law can affect the rights and obligations of the mitigation banker and government agencies. After providing an overview of wetland mitigation banking and a primer on bankruptcy law, the Article examines two ongoing bankruptcy actions that involve mitigation banks. It then offers suggestions that regulatory agencies can adopt to protect against the consequences of a bankrupt mitigation bank.

Royal Gardner is a Professor of Law at the Stetson University College of Law and Director of the Stetson University Institute for Biodiversity Law and Policy. He served on the National Research Council's Committee on Mitigating Wetland Losses. Theresa Radwan is Associate Dean of Academics and Associate Professor of Law at the Stetson University College of Law. Dean Radwan has represented creditors in business bankruptcies. The authors thank Melody B. James (2L) for her excellent research assistance and those regulators and attorneys involved with the bankruptcy proceedings who provided comments on an earlier draft of this Article.

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