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Presenting a live 90-minute webinar with interactive Q&A

Identifying and Managing Environmental Risks in Commercial Transactions

Identifying, Quantifying and Allocating Potential Liabilities and Long-Term Environmental Obligations

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific THURSDAY, FEBRUARY 9, 2017

Lawrence P . Schnapf, Principal, Schnapf LLC, New York William J. Squires, III, Partner, Hinckley Allen & Snyder, Boston

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LAWRENCE P . SCHNAPF SCHNAPF LLC WILLIAM J. SQUIRES, III HINCKLEY, ALLEN & SNYDER LLP

IDENTIFYING AND MANAGING ENVIRONMENTAL RISKS IN COMMERCIAL TRANSACTIONS

STRAFFORD PUBLICATIONS FEBRUARY 9, 2017

AGENDA

• Purpose of Environmental Due Diligence
• Conducting Environmental Due Diligence
• Allocating and Mitigating Environmental Risks

6

7

Purpose of Environmental Due Diligence

IDENT

NTIFYI FYING NG ENVIRONMEN ENTAL RISKS

8

WHY

HY ENVI VIRON ONMEN MENTAL DUE UE DILI LIGENC ENCE?

• Qualify for Defenses Under Environmental Laws Imposing Strict and Joint Liability For Cleanups



Government Cost Recovery and Unilateral Administrative Orders



Third Party Cost Recovery or Contribution Claims

• Quantify Material Environmental Liabilities Under Federal and State Laws Imposing Compliance

Obligations



Change in Business Operations



Construction Delays or Overruns

• Comply With State and Local Transactional Laws



NJ ISRA; CT Transfer Act



NYC e-designation

• Satisfy Lender Requirements

9

WHY

HY ENVI VIRON ONMEN MENTAL DUE UE DILI LIGENC ENCE?

• Evaluate Common Law Liabilities

 Successor, Parent, Affiliate Liability  Property Damage Claims  Personal Injury

• Evaluate Contractual/Lease Obligations

 CERCLA 107(e)-parties may not contract away liability  “As Is” only applies to reps and warranties  Release Should refer to “CERCLA-like” liabilities

10

GOAL OF DUE

UE DILI LIGENC ENCE

• Not To Eliminate ALL Risk but Understand Material Risks
• Cleanup
• Compliance
• Permits for Business Plans
• Culture
• Identify and Allocate (Manage) Risk Based on Nature of Transaction
• Stage of Deal (pre-bid, exclusivity period)
• Time, cost, data room vs site assessments
• Deal Killers
• Purchaser Tolerance
• Bid Pricing
• Markup Purchase Agreement
• Identify Potential Mitigation Tools

11

KEY

EY ENVIRONMEN ENTAL LAWS WS

• Principal Sources of Cleanup Liability

 CERCLA, 42 U.S.C. 9601 et seq.  RCRA, 42 U.S.C. 6901 et seq.  TSCA (PCBs)  State Versions of CERCLA/RCRA  State Transaction Statues  State Superlien Statutes

12

PRINCIP

IPAL SOURCES OF OF REGUL ULATORY COMPLIAN LIANCE

• Clean Air Act (CAA), 42 U.S.C. 7401 et. seq.
• Clean Water Act (CWA), 33 U.S.C. 1251 et seq.
• Resource Conservation and Recovery Act (RCRA), 42 U.S.C. 6901
• et. Seq.
• Toxic Substances Control Act (TSCA), 15 U.S.C. 2601 et seq.
• Emergency Planning and Community Right to Know (EPCRA), 42

U.S.C. 11001 et seq.

• Comparable State Laws

13

CER ERCLA CLA AUTHOR

ORIT ITY

• Established “Superfund” to finance cleanups
• Authorizes list of most heavily- contaminated sites.
• Gov’t May perform cleanups.
• Unilateral Administrative Orders to address sites posing substantial

and imminent endangerment.

• Recover response costs from PRPs.
• Permits PRPs to seek reimbursement of response costs from other

PRPs.

14

UNILA

LATER ERAL AL ADMINIS ISTRA RATIVE IVE ORDERS

42 2 USC 960 606

• EPA may issue UAO when it determines

 Release or threatened Release  May pose imminent and substantial endangerment to public health or the

environment

• Failure to comply without sufficient cause may result in fines and

treble damages

15

STANDARD

RD OF OF LIABILIT LITY

• STRICT LIABILITY
• RETROACTIVE LIABILITY
• Joint (107 actions only)

16

ELE

LEMEN MENTS OF OF CER

ERCLA CLA LIABILIT

LITY

• Release

 Includes “disposal”  Passive migration vs active disposal

• Hazardous Substance
• Facility
• Response Costs

 Remedial or Removal  Consistency with NCP

17

CER ERCLA CLA LIABLE

LE PARTI RTIES

• Current and Former Owners
• Current and Past Operators
• Generators
• Transporters

18

CER ERCLA CLA OWNER

• Current Owner
• Past Owner “at time of disposal”

 Passive vs. active disposal

• Title Holders
• Easement Holders
• Long-Term Tenants
• Parent Corporations

19

CER ERCLA CLA OPERATOR

• Based on Control

 Actual vs ability to control

• Past Operator “at time of disposal”

 Active vs passive disposal

20

CER ERCLA CLA ARRANGER

ER

• Intent to Arrange for Disposal of Hazardous Substance

 Sale of raw materials/useful product  Liable if transported to non-approved site

21

TRANSP

SPOR ORTER ER

• Must make decision where to dispose hazardous substances

22

CER ERCLA CLA AFFIRMA

MATIVE IVE DEFENS NSES ES

• Act of God
• Act of War
• Third Party
• Innocent Landowner (ILO)
• Bona Fide Prospective Purchaser (BFPP)
• Contiguous Property Owner (CPO)

23

THIRD

RD PART RTY TRANSFER ERS

• Release Solely Caused by TP
• No direct and indirect contractual relationship

 ILO Exception to this element

• Due care
• Precaution against foreseeable acts or omissions

24

INNOCEN

ENT LANDOWNER DEFEN ENSE SE (ILO)

O) 42 2 U.S.C .C. . 9601(35 1(35)(A (A) ) AND (B) (B)

• Did Not Know or Had No Reason to Know of Release
• Perform Pre-Acquisition AAI
• Comply with Post-Acquisition Continuing Obligations

 Cooperate and Provide Access for Persons Performing Response Actions  Comply With Land Use Controls (LUCs)  Provide Access to Persons Maintaining LUCs

25

BFPP P - 42 42 U.S.C. .C. 960 601(40 1(40)

• Applies to transactions after January 11,2002
• Applies to Purchasers and Tenants
• Applies to brownfield and NPL sites

26

ELE

LEMEN MENTS OF OF BF

BFPP PP DEFENSE

SE

• Threshold Criteria

 Conducted AAI  Not PRP or affiliated with PRP by:

 direct or indirect familial relationship  contractual or corporate relationship  Corporate Reorganization

 Disposal took place prior to acquisition

27

BFPP P DEFENSE

SE ELEMEN ENTS CONT’D

• Continuing Obligations

 Complied with All Applicable Reporting Requirements  Undertake “Appropriate Care”  Cooperate and Provide Access to Persons Performing Response Actions  Comply With LUCs Provide Access for Persons Maintaining LUCs  Comply with EPA CERCLA Information Requests or Subpoenas

28

CPO PO DEFEN

ENSE SE

42 2 U.S.C. .C. 9607( 7(Q)

• Owner did not cause, contribute, or consent to release
• Conduct “Appropriate Inquiry”
• Exercise “Appropriate Care”
• Cooperate and Provide Access To Persons Performing Cleanups
• Comply With LUCs
• Provide Access To Persons Maintaining LUCs
• Comply with all release reporting requirements
• Comply with EPA CERCLA Information Requests and Subpoenas
• Owner not a PRP or affiliated with PRP

29

SECURE

RED CREDIT ITOR OR EXEMPTION ION

• Holder of Security Interest Not Owner if

 Holds “indicia of ownership” primarily to protect security interest  Did Not “Participate in Management” of facility

• Post-Foreclosure Immunity if:

 Takes commercially reasonable steps to sale property  Does not Cause or Exacerbate Release

• Beware of:

 RCRA UST Secured Creditor Exemption  RCRA 7002 actions  Common Law Failure to Disclose

30

TYPICA

ICAL BANK CON ONCERN RNS

• Credit Risk

 Borrower Ability to Pay Loan  Value of Collateral

• Direct Liability

 Cleanup costs  Toxic Torts

• Reputational Risk

31

TYPE OF LENDER MAY INFLUENCE DILIGENCE

• Community Bank

 Small borrowers with limited resources for environmental risks  Frequently little or no environmental diligence

• SBA 7(a) and 504 programs Loan (SOP 50 10 5(G))

 < $150K and not on NAICS list, Environmental Questionnaire  >$150K and on NAICS, perform Records Search with Risk Assessment

(RSRA) report.

 “High Risk” proceeds to Phase 1

• Traditional Balance Sheet/Life Insurance

 Borrower financial strength can influence diligence

32

TYPES

ES OF OF LENDER ERS

• Loan Syndication

 Piggy-back on lead lender

• Construction Loan

 Environmental overruns  Ability to be taken out

• Mezzanine Lender

 Usually piggy-backs on senior lender  Steps in shows of borrower on default

• CMBS Lender

 Sells loan to trust  Makes reps about diligence  B-Piece Buyers key role

33

TYPES OF LENDERS CONT’D

• Private Equity

 Revolving/term loan often with warrants or board seats  Qualify for secured creditor?

34

RCR CRA A GENERATORS

RS

• Three types

 Large Quantity Generator  Small Quantity Generator

 100-1000 kg (220 to 2200 lbs)

 Conditionally Exempt Small Quantity Generator

 < 100 kg (220 lbs)

• Closure Obligations

 Run with land

35

RCR CRA A TREATMEN

ENT,

, STORAGE AND DISPOSAL FACILIT

ITIES IES

(TSDF SDF)

• Permitted or Interim Status
• Design and Operating Standards
• Preparedness and Recordkeeping
• Ground water monitoring
• Land disposal restrictions
• Closure/Post Closure
• Corrective Action
• Financial Assurance

36

RCRA CRA COR

ORREC ECTIVE IVE ACTION CTION

• Permit Authority- HMWUs and SWMUs

 3004 (u) (onsite)  3004 (v) (offsite)

• Interim Status and Generators

 3008 (h)

• Procedure

 RCRA Facility Assessment (“RFA”)  RCRA Facility Investigation (“RFI”)  Corrective Measures Study (“CMS”)  Corrective Measure Implementation (“CMI”)  Corrective Action Management Unit Rule (“CAMU”)

37

700 002 2 AND 7003 03 INJUNCTIVE

IVE RELIEF IEF

• 7002- Private Parties

 Any person “contributing to”  Past or present handling…disposal of solid or hazardous waste  May present imminent and substantial endangerment

• 7003 Govt. Only

38

UNDER

ERGROUN UND STORAGE TANKS

42 2 U.S.C .C. . 6991-699 6991M

• Regulated tanks

 Applies to storage of petroleum or hazardous substance  Not apply to heating oil tanks used for on-site consumption  Not apply to tanks storing HW are subject to Subtitle C  Not apply to motor fuel tanks less than 1100 gallons at farms and homes

39

USTS CONT’D

• UST Design Standards
• Release Reporting

 Report spills or overflow of 25 gallons or more  Reportable quantity of hazardous substance  Suspected releases

• Corrective Action
• UST Closure
• Financial Assurance
• Secured Creditor Exemption for USTs

40

CLE

LEAN AIR IR ACT CT

• Permit Programs

 NSR (PSD and Non-Attainment)  Title V

• New Source Performance Standards (NSPS)
• Hazardous Air Pollutants (HAPs)
• Risk Management Plans
• Asbestos-Containing Programs
• GHG Regulation
• Title IV Acid Rain and Title VI Ozone-Depleting Substances

41

NEW

EW SOURCE PERFORM ORMANCE CE STANDARDS (NS

NSPS)

• When construction commences- actual physical work or contract has

been signed

 Any physical change or change in method of operation which

increases the amount of any air pollutant regulated under CAA that was not previously emitted.

 expressed in hourly emissions rate at maximum physical capacity before and

after change

 Hourly emission rate is after controls installed

• Reconstruction: at least 50% of total cost of a comparable new facility

even if no increase in emissions

• Minor NSPS exempt from Title V

 Purchase Emission Reduction Credits (ERCs)

• Best Demonstrated Technology (BDAT)

42

CLE

LEAN AIR IR ACT CT

 New Source Review (NSR)

 Construction of new major sources or modification of existing

major stationary sources

• physical change
• change in the operation of a major source that results in

 Significant net increase in emissions that impacts air quality

 PSD vs. Non-Attainment

43

NS NSR- PSD (ATTAINMEN

ENT AREAS)

• Major source



any source that belongs to a list of 28 categories



emits or PTE emit 100 tpy of air pollutants regulated by the CAA (except HAPs or any type of source that has the PTE 250 tpy

• Significant Net emissions



CO (100 tpy)



NOx, SO2 and VOCs(40 tpy)



PM (25 tpy)

• Best available control technology ("BACT")

44

NS NSR NON

ON-ATTAINMEN INMENT(§173

73)

• Only covers six criteria pollutants
• LAER (more stringent that BACT)
• Major Source- depends on pollutant and classification

 Marginal and Moderate Non-Attainment areas: 100 tpy NOx/VOC  Serious Non-Attainment: 50 tpy NOx/VOC.  Severe Non-Attainment: 25 tpy NOx/VOC  Extreme Non-Attainment areas: 10 tpy  CO (100 to 50 tpy);  PM (100-70 tpy)

• Offsets- Range from 1:1 to 1:5 depending on the air quality

classification

45

CWA A PERMIT

IT PROG OGRAMS MS

• NPDES Permit Program (§402)

 Industrial Dischargers  Municipal (POTWs) (§301)  SSO/CSO (§402(q))  Indirect Dischargers (pretreatment-§317)  Stormwater (§ 402(p))  Sludge Disposal (§405)  CAFOs

• Wetlands (§404)

46

NP NPDES ES

• Discharge

 Addition of pollutant

• Pollutants

 Not include fluids to promote oil/gas production

• Point Source
• Waters of United States

47

NP NPDES ES PERMITS

ITS

• Individual vs General Permits
• Duty to Apply
• Effluent Limits

 Technology (BCT, BPT, BAT, NSPS)  water quality-based standards

• Discharge Monitoring Reports
• Standard Conditions
• Special Conditions

48

COM

OMMO MON LAW AW

• Negligence
• Trespass
• Nuisance
• Strict Liability for Abnormally Dangerous Activity

49

COM

OMMO MON CHALLEN LLENGES GES

• Historic Contamination
• Lack of Awareness (not intentional)
• Evolving Standards of Care
• Acceptable Practices At Time of Release or Disposal
• Lack of Statutory or Regulatory Programs
• Truly responsible parties unavailable
• Statute of Limitations (SOL)

50

SUCCESSOR

OR LIABILIT LITY OVERVI RVIEW EW

• Asset Purchase

 Generally no successor liability unless four exceptions (express/implied

assumption, fraud, de facto merger or continuity)

• Stock Purchase- liabilities follow purchaser unless excluded
• Merger- acquirer assumes liabilities
• Bankruptcy (§363 or §1141)

 Order may provide for “free and clear” and no successor liability

51

VEIL PIERCING

NG

• Parent Corporation Liability for Subsidiary

 State Law Predominates  Owner Liability

 Direct liability of facility

 Operator Liability

 Control over operation  Corporate officers may wear “dual hats”

52

53

Conducting Environmental Due Diligence

CONDUC

UCTIN ING ENVIRONM NMEN ENTAL DUE UE DILIGE GENCE

GETTING STARTE

RTED

• Assemble Experienced Team:

 Environmental legal counsel  Environmental consulting team  Knowledgeable EH&S staff

• Consider Big Picture
• Customize Environmental Due Diligence Request List
• Consider Timing
• Determine Appropriate Scope and Methods

54

CONDUC

UCTIN ING ENVIRONM NMEN ENTAL DUE UE DILIGE GENCE

COMMON METHODS

• Phase I Environmental Site Assessments
• Phase II Subsurface Investigations
• Permitting and Regulatory Compliance Review/Audit
• Desktop Reviews
• Gather and Review:

 Environmental reports, audits and data  Permits, registrations and agency correspondence  General notice letters, 104(e) requests and NFAs  Notices of violation and administrative/judicial pleadings  Agreements relating to previous acquisitions and dispositions of

businesses and real property

 Environmental insurance

55

CONDUC

UCTIN ING ENVIRONM NMEN ENTAL DUE UE DILIGE GENCE

PHASE I E ENVIRONM

NMEN ENTAL SITE ASSESSMEN ENT

• An inquiry by an environmental professional to ascertain

whether there is reason to believe the property is contaminated.

• Elements of Phase I ESA (ASTM E1527-13):

 Interviews with current and former owners, operators and others  Review of historical sources  Review of public records  Site inspection  Review of information provided by seller

56

CONDUC

UCTIN ING ENVIRONM NMEN ENTAL DUE UE DILIGE GENCE

PHASE I E ENVIRONM

NMEN ENTAL SITE ASSESSMEN ENT

• Standard of Care – Must identify:

 Recognized Environmental Conditions (RECs)  Historical Recognized Environmental Conditions (HRECs)  Controlled Recognized Environmental Conditions (CRECs)  Potential for Vapor Intrusion  User Provided Information (i.e., User Questionnaire)  Data Gaps

57

CONDUC

UCTIN ING ENVIRONM NMEN ENTAL DUE UE DILIGE GENCE

PHASE II SUBSURFACE

CE INVESTIG IGATION ION

• Is there contamination?

 Nature, extent and source of contamination?  Estimated time and cost to remediate?  Risk to current building occupants?  Impacts to on-going operations?  Impacts to proposed development?

• Timing
• Relevant Contractual Concepts

 Real Estate Purchase Agreement  Site Access Agreement

58

CONDUC

UCTIN ING ENVIRONM NMEN ENTAL DUE UE DILIGE GENCE

PERMIT

ITTIN ING AND REGULA LATOR ORY COMPLIAN LIANCE CE

• Do the business operations comply with environmental laws?

 Does the business have all permits?  Are there pending violations or enforcement actions?  Are major expenditures required to achieve compliance?  Any pending changes in law that will make compliance

difficult or expensive?

 Is there a risk of citizen suits?

59

CON

ONDUCT UCTIN ING ENVI VIRON ONME MENTAL DUE UE DILI LIGEN GENCE

IDENT

NTIFYI FYING NG PRE RE- AND POS OST-CLOSI OSING NG OBLI LIGATION ONS

• Permit transfer requirements

 Must permits be transferred? (equity vs. asset)

 How and when?  Transfer vs. cancellation & reissuance

 Transfer of consent decrees, orders, settlement agreements  May need to assure compliance prior to transfer

• Property transfer disclosure requirements

 NJ ISRA  CT Property Transfer Act  Other

60

CONDUC

UCTIN ING ENVIRONM NMEN ENTAL DUE UE DILIGE GENCE

TO EVALUATE AND STRU

RUCTURE THE DEAL

• Allocation of environmental liabilities between buyer & seller
• Choice of acquisition type (e.g., asset purchase vs. merger)
• Assessment of potential current/future remediation & compliance

costs in pricing deal or obtaining concessions

 Including discovered or planned capital expenditures

• Properly value property to be transferred
• Structure deal to ensure application of landowner and/or lender

liability protections

• Anticipate potential issues with timing of closing
• Evaluate need to acquire/supplement environmental insurance
• Determine whether to proceed with transaction

61

62

Allocating and Mitigating Environmental Risks

ALLOC

OCATING ING AND MITIGATING ENVIRONM NMEN ENTAL RISKS

RELEV

LEVAN ANT COMMER ERCIAL IAL TRANSACTION IONS

63

• Purchase and Sale of Business

 Stock Purchase Agreements  Asset Purchase Agreements  Merger Agreements

• Purchase and Sale of Real Property

 Real Estate Purchase and Sale Agreements  Lease Agreements

• Acquisition and Construction Financing

 Various Loan Agreements

ALLOC

OCATING ING AND MITIGATING ENVIRONM NMEN ENTAL RISKS

GENER

ERAL CONSIDE DERA RATION ONS

64

• In General:

 One cannot contract away statutory environmental liabilities  Contracts bind the parties to the contract and do not bind third parties  A contractual protection is only as good as the parties’ balance sheet

• Consider Purpose, Nature and Structure of Each Transaction
• Determine Risk Tolerance of Client(s)
• Assess Applicable Legal Requirements

 May not be limited to jurisdiction of real property/facility

ALLOC

OCATING ING AND MITIGATING ENVIRONM NMEN ENTAL RISKS

CONSIDER

IDERATION IONS SPECIFIC IC TO TO DEAL STRU RUCTURE

65

• For Equity Deals:

 Successor liability concerns regarding:

 Off-site disposal of hazardous waste  Pre-closing violations of environmental laws  Formerly owned, leased or operated real property  Legacy businesses

 Merger Agreements

 Environmental provisions typically reciprocal  Who are the indemnitors?

• For Asset and Real Estate Deals:

 Consider likelihood of successor liability exposure  Permit transfers and potential need for new permits

ALLOC

OCATING ING AND MITIGATING ENVIRONM NMEN ENTAL RISKS

KEY

EY CONTRACTUAL CONCEP EPTS AND PROVISION IONS

66

• Contract Concepts and Provisions for Allocating Liability and

Responsibility

 Definitions  Representation and Warranties  Covenants and Conditions Precedent  Indemnities and Escrows  Releases & Covenants Not to Sue  Purchase Price

ALLOC

OCATING ING AND MITIGATING ENVIRONM NMEN ENTAL RISKS

KEY

EY DEFINIT ITION ONAL AL TERMS

• Environmental Terms:

 Environmental Laws  Hazardous Materials  Environmental Liabilities  Existing Environmental Conditions  Response Actions/Response Costs

• General Terms:

 MAE  Permits  Real Property  Excluded Assets  Knowledge

67

ALLOC

OCATING ING AND MITIGATING ENVIRONM NMEN ENTAL RISKS

COMMON REPRES

ESEN ENTATION IONS AND WARRANTIES IES

• Compliance with environmental laws
• Have, maintain and comply with environmental permits
• Handling, storage, transportation, disposal and treatment of

hazardous materials and wastes in compliance with law

• No receipt of notices alleging:

 Violations of any environmental requirements;  Third-party liability related to environmental requirements

• r conditions
• No on- or off-site releases of any hazardous substances
• Disclosure of all environmental reports, data and documents

68

KEY

EY CONTRACTUAL CONCEP EPTS AND PROVISION IONS

REPRE

RESEN SENTATION IONS AND WARRANTIES IES

• Potential Limitations

 Materiality Qualifiers  Knowledge Qualifiers  Duration & Survival Period  Disclosure Schedules

• Remedies for Breaches
• Potential Overlap/Conflict with Other R&Ws
• Careful Coordination with Client when Giving R&Ws

69

ALLOC

OCATING ING AND MITIGATING ENVIRONM NMEN ENTAL RISKS

COVEN

VENAN ANTS AND CONDITION IONS

• Pre-Closing Covenants (Examples)

 Seller shall operate and maintain all facilities in compliance with all

applicable environmental laws

 Seller shall immediately notify purchaser of any notices received by

seller alleging violations of environmental laws

 Seller shall ensure compliance with all permit transfer requirements

(or warrant no such requirements)

• Post-Closing Covenants

 Example - Covenant to complete existing cleanup, post-closing

compliance plan, agreement on cleanup standards

• Remedies for Breach of Covenants

 Example - For seller material breach, purchaser right to terminate with

no liability

• Conditions to Closing

70

ALLOC

OCATING ING AND MITIGATING ENVIRONM NMEN ENTAL RISKS

INDEM

EMNIT ITIES IES

• Allocate remediation and other liabilities, including:

 Fines, penalties, capital expenditures for violations of law  Tort claims  Natural resource damage claims

• Potential Scope of Indemnity - Indemnification for:

 Breaches of representations and warranties  Excluded environmental liabilities  Other excluded liabilities (e.g., seller-retained assets)  Known/unknown environmental conditions

71

ALLOC

OCATING ING AND MITIGATING ENVIRONM NMEN ENTAL RISKS

INDEM

EMNIT ITIES IES

72

• Limitations on Indemnity:

 Deductibles  Caps  Thresholds/Deductibles  Survival Periods

• For what?

 Pre-closing vs. post-closing?  Only what is required by government or anything required by laws?  Voluntary cleanup?  Cleanup of soil and groundwater only?

ALLOC

OCATING ING AND MITIGATING ENVIRONM NMEN ENTAL RISKS

INDEM

EMNIT ITIES IES

73

• Other Considerations:

 What kind of cleanup?

 Industrial/commercial versus residential?  Are institutional controls permitted?

 Third party claims (e.g., diminished value, toxic tort, business loss)  Who controls relationship with government and decisions

regarding cleanup?

 Right to comment on reports and attend meetings?  Voluntary testing provision

ALLOC

OCATING ING AND MITIGATING ENVIRONM NMEN ENTAL RISKS

OTHER ALLOCATION

ION TECHNI NIQUES QUES

• Purchase Price Adjustments
• Releases and Covenants Not To Sue
• Cost Sharing
• Escrows To Fund Cleanup
• Deal Structure (e.g., Equity vs. Asset)
• Use of Deed Restrictions
• Potential Statutory Limitations on Liability

74

ALLOC

OCATING ING AND MITIGATING ENVIRONM NMEN ENTAL RISKS

USE

SE OF OF FEDER ERAL AL AND STATE MITIGATION TOOLS OOLS

• Covenants Not to Sue
• Contribution Protection
• Brownfields Programs:

 Grants and Loans  Tax Incentives  Liability Protections

• State UST Financial Assurance Funds
• EPA Comfort Letters
• Voluntary Cleanup Programs
• ILOD/BFPP/Eligible Person/Eligible Tenant

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CON

ONTACT INFOR ORMA MATIO ION

Lawrence P Schnapf Schnapf LLC 55 East 87th Street #8B New York, NY 10128 212.876.3189 larry@schnapflaw.com www.SchnapfLaw.com William J. Squires, III Hinckley, Allen & Snyder LLP 28 State Street Boston, MA 02109 617.378.4212 wsquires@hinckleyallen.com www.hinckleyallen.com

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