Your May 31 editorial, "Liquid asset is public," questioned a portion of an order entered by Judge Lamar W. Davis Jr. on May 20 in the Durango Georgia Paper Company bankruptcy case.

The order authorized the Trustee of Durango Georgia to offer the bankrupt company's interest in water permits for sale, along with other assets of the company, subject to the approval of the Georgia Department of Natural Resources.

The right to pump groundwater is a valuable asset for businesses. Permits are necessary only if a business anticipates the need to pump more than 100,000 gallons of groundwater per day. While the public has an interest in groundwater, that interest is not without limits.

Once a groundwater permit is issued to a business, the business acquires a property interest, not in the water itself, but in the right to pump the water for business use. Once a permit is issued, no government agency may arbitrarily revoke it without compensating the holder of the permit.

Once issued, the right to pump the quantity of groundwater authorized by the permit becomes a valuable and essential property interest that may be sold in connection with the sale of a business, just like any other interest in property.

Whoever holds the permit remains subject to the same DNR regulations that governed the party to whom the permit was originally issued.

The permitting process recognizes that businesses frequently require more groundwater than the 100,000 gallons per day allocated to each citizen of the state. The public's interest in groundwater is similar to the public's interest in air.

While we don't yet allocate a given amount of air that may be inhaled by businesses without a permit, elimination of a permit to use groundwater would have the same effect as the elimination of a business' right to use sufficient air to sustain its operations. That interest in property of the holder of such a permit is a real, essential, and valuable business asset.

Bankruptcies deal with interests in property. All interests in property of a business in bankruptcy fall under the exclusive jurisdiction of the United States Bankruptcy Courts. At the same time, a federal bankruptcy does not eliminate the state's right to regulate the use of those property interests.

Judge Davis' order authorizing the Durango Trustee to sell the interest in its water permits balances those competing interests perfectly. He did not err. His order was right on target.

WARD STONE JR.
Attorney for Liquidating Trustee
Macon

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