Much has been written about the twin decisions issued by the Honorable Robert Gerber in the Bankruptcy Court for the Southern District of New York in In re Lyondell Chem. Co., 442 B.R. 236 (Bankr. S.D.N.Y. 2001), and In re Chemtura Corp., 443 B.R. 601 (Bankr. S.D.N.Y. 2011). Judge Gerber disallowed as contingent contribution claims under Section 502(e)(1)(B) of the Bankruptcy Code all “future” environmental contribution claims filed by potentially responsible parties (PRPs) whether the claims were based on contract, contribution or a direct cause of action under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).

In cases where environmental liability and bankruptcy intersect, these decisions may greatly impact the landscape with respect to allocation of liability among PRPs with ongoing obligations to remediate contaminated property. However, while there has been a great deal of discussion regarding the disallowed claims in both Chemtura and Lyondell, little has been written of the court’s decision in Chemtura to allow the contingent “future” portion of the proof of claim filed by the Delaware Sand & Gravel Remedial Trust (the DS&G trust), notwithstanding that the claim related to the debtors’ future costs to pay for remedial work at a Superfund site, much like the other proofs of claim for future response costs that were disallowed by the court in Lyondell and Chemtura.

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