Abitibibowater wins Canada case on environmental cleanup costs

AbitibiBowater Inc.'s headquarters are seen in Montreal, May 15, 2009.

OTTAWA (Reuters) - The Supreme Court of Canada ruled on Friday in favor of newsprint maker Abitibibowater Inc, which now operates as Resolute Forest Products Inc, in a case on liability for environmental cleanup costs in Newfoundland.

The case centered on whether a company's duty to remove environmental contamination is like a commercial debt or another financial claim that can be reduced or eliminated when a company goes through bankruptcy proceedings. Montreal-based Abitibibowater was under bankruptcy protection in 2009-2010.

Canada's top court decided in favor of Abitibibowater.

Canadian media had reported before the decision was announced that Abitibibowater's clean-up liability could have been up to C$200 million ($200 million).

The case is Her Majesty the Queen in Right of the Province of Newfoundland and Labrador v Abitibibowater Inc. et al (Que) (33797).

($1=$0.99 Canadian)

(Reporting by Randall Palmer; Editing by Frank McGurty and Grant McCool)