Frilac Bankruptcy Estate Country/Territory Sweden Type of court National - higher court Date May 17, 2005 Source UNEP, InforMEA Court name Miljööverdomstolen Seat of court Stockholm Reference number M3079-04 Language Swedish Subject Waste & hazardous substances, Legal questions Keyword Resource/damage valuation Abstract The case concerned whether a bankruptcy estate could be responsible for soil investigations after having left the property where an environmentally hazardous activity had been carried out.After an injunction to carry out soil investigations in accordance with the Environmental Protection Act and the Environmental Code had been ordered by a local environmental council, the bankruptcy manager appealed the decision, first to the Environmental Court and later to the Environmental Court of Appeal.The Environmental Court of Appeal began by reiterating the polluter pays principle, which is a fundamental principle in Swedish environmental law. As a rule, the operator of the environmentally hazardous activity is responsible for possible after treatment to restore a polluted area, but there are certain exceptions when for example the owner of a property is responsible. Within the insolvency law, however, the bankruptcy estate is not responsible for the debtor’s obligations.In a number of earlier cases, bankruptcy estates have been made responsible for after treatments of different kinds. This case is however different as the debtor had ceased with their operations, terminated the rental agreement for the property and informed the regulatory authority well before the bankruptcy took place. The bankruptcy manager no longer runs the operations having caused the potential environmental damage.As the bankruptcy estate had no operations connected to the activity or the permit for the activity, the Environmental Court of Appeal concluded that the bankruptcy estate could not be held responsible for the damage and therefore not responsible for after treatments. Full text M3079-04.pdf