Bankrupt Oil Firms Must Fund Well Cleanup, Canadian Court Rules

Bankrupt oil companies must pay the costs of cleaning up their abandoned wells, Canada’s top court ruled, striking down a decision that allowed them to pass those costs onto an industry-funded group.

In a 5-2 decision, the Supreme Court of Canada said companies or their receivers can’t walk away from their environmental liabilities by invoking federal legislation regarding the order in which creditors are to be paid.

The Jan. 31, ruling in the case of Redwater Energy Corp., which filed for bankruptcy in late 2015, shifts the cost of remediating spent or inactive wells onto the buyers of bankrupt companies ...