environmental issues in secured transactions
TRANSCRIPT
A Professional Association
Daniel S. Schleck, Esq., P.E., CHMM, C.E.S. Halleland Habicht, P.A.
33 South Sixth Street #3900Minneapolis, Minnesota 55402
(612) 836-5500
Environmental Issues in Secured Transactions
A Professional Association
OVERVIEW
Real Estate Issues
Operations
Contract Provisions
Pricing and Alternatives Risk Management
A Professional Association
General Provisions
Attorney/Client Privilege
Scope Definition
Contingencies
Requirements of Lender
A Professional Association
Real Property Evaluation
1. Title Issue
2. ASTM Due Diligence
3. Non-ASTM Considerations
4. New Federal Legislation
A Professional Association
Leased vs. Owned
Past Owner uses
Seller’s Business
Title Issues in Environmental Due Diligence
A Professional Association
1527-00 is the Standard for Phase I
Items included in Review:
Property History
Adjoining Property History and Use
Review of Regulatory Databases
On-site Review of Property
ASTM Due Diligence
A Professional Association
Non-ASTM Scope Considerations
1. Asbestos Building Materials
2. Lead Based Paint
3. Wetlands
4. Mold
5. Radon
6. Lead in Drinking Water
A Professional Association
The Small Business Liability Relief and Brownfields Revitalization Act
of 2002
New Standards for Phase Is
Clarification of the Innocent Landowner Defense
Exempt Bona-fide Purchasers from Liability
Definitions of Bona-fide Purchaser
A Professional Association
What if an Issue Arises?
Conduct a Phase II Assessment
1. Intrusive Soil and Groundwater Sampling
2. More Expensive than a Phase I
3. Should have plan for closure prior to initiation
4. In Minnesota, seek protection of the MPCA Voluntary Investigation and Cleanup Program
5. Insurance
A Professional Association
Environmental Concerns in Business Acquisition
1. Permitting
A. NPDES – Wastewater
B. Air
C. Stormwater
D. Noise
E. Wetlands
2. Permit Transfer
3. State and Federal Reporting
A Professional Association
Contract Provisions
1. Asset Only Acquisition
Continuing Business Enterprise
2. Definition Section of Agreement
3. Express Allocation of Environmental Liability
4. Representation and Warranties
A Professional Association
Pricing and Alternatives to Risk Management
1. Price Adjustment
2. Regulatory Protections
3. Environmental Insurance
A Professional Association
Regulatory Protections
1. Voluntary Investigation and Cleanup Program
A.No Association Letter
B. Off-Site Source Determination Letter
C. No Further Action Determination
D.Certificate of Completion
E. Proposed (Voluntary Party Certificate of Completion)