The presence of potential environmental liabilities and the allocating of responsibility for them are an integral part of virtually every transaction involving the purchase and sale of real estate and industrial business operations. It has also become a common factor in stock and asset transactions involving industrial facilities, bank loans and secured transactions involving collateral, leasehold transactions, and even trust arrangements in the preparation of wills. The attorneys in our Environmental Practice Group (EPG) understand the technical aspects of manufacturing operations and environmental regulation and regularly work in unison with our transactional attorneys. Thus, these lawyers have a keen sense of business and inherently understand what is needed on the technical side to get a transaction closed while protecting our client’s interests.
The EPG regularly assists buyers, sellers, lessors, lessees, lenders and others involved in real estate transactions and corporate acquisitions and divestitures in assessing the potential environmental liabilities associated with such transactions, and crafting ways to minimize those liabilities, and to shift or allocate them between multiple parties. This includes negotiation among private parties and governmental agencies with jurisdiction over the conditions and operations present at the property or facility. The EPG has drafted virtually every conceivable type of contract language to achieve these purposes, including indemnifications, escrows, sunset provisions, termination clauses, innocent purchaser defense language, dispute resolution mechanisms, and other contract protections.
The EPG regularly counsels financial institutions regarding the potential environmental liabilities associated with loans, trust arrangements, and other secured transactions where real property is involved or the status of environmental compliance may present a future drain on resources and/or impair the value of the collateral. We counsel lenders when they must take steps to protect their security interest, such as foreclosure or taking a deed in lieu on industrial property, so they do not make a bad loan into something far worse.
- Performing and managing all aspects of environmental due diligence, including managing environmental consultants in the performance of Phase I and Phase II environmental assessments and conducting corporate-wide compliance audits and developing compliance plans.
- Analyzing the implications of environmental laws and regulations on business transactions and structuring solutions that seek to maximize opportunities and minimize exposure.
- Negotiating agreements for complex real estate and corporate transactions, including representations and warranties, indemnification and other risk allocation mechanisms.
- Evaluating eligibility and merits of participating in state voluntary cleanup programs.
- Assisting clients with implementation of work under state voluntary cleanup programs and negotiation of environmental covenants and other controls imposed on real estate.
- Structuring "brownfields" transactions and financing from federal, state and local sources.
- Overseeing the development and implementation of remedial action plans.
- Evaluating and negotiating environmental insurance options.
Transactional-related work includes:
- Assisting a developer in the acquisition and redevelopment of environmentally impaired properties for retail use in Indiana, Kentucky, Michigan, Ohio, Pennsylvania and other states. Our work included managing due diligence and remediation, contract negotiation, interface with regulatory agencies, and addressing lender considerations.
- Representation of a hospital system in the acquisition and development of a major healthcare facility. Work included oversight of environmental due diligence and remediation of impacted areas, as well as permitting with US Army Corps of Engineers and Ohio EPA for impacts to jurisdictional waters and wetlands.
- Successful implementation of multiple projects under Ohio’s Voluntary Action Program (VAP) involving investigation, remediation and redevelopment of commercial and industrial properties, including former dry cleaners. Also, significant experience under Indiana’s Voluntary Remediation Program (VRP) and Kentucky’s Voluntary Environmental Remediation Program (VERP).
- Negotiation of purchase/sale agreements and oversight and/or performance of environmental due diligence in the acquisition of various industrial facilities, including chemical manufacturing, food and beverage manufacturing metal plating, casket manufacturing, hospitals, bulk terminals, flavor and fragrance manufacturing, and building products. In most instances, we perform the pre-acquisition environmental compliance evaluation.
- Negotiation of environmental provisions of multiple agreements, including asset sale agreement, shared utilities and shared services agreements, and negotiation and reissuance of air, wastewater, RCRA TSD and other environmental permits for a 60-acre pharmaceutical research and development/manufacturing facility that was sold and divided into three parcels. Two parcels were sold to other pharmaceutical companies and the third was donated to a major public university.
- Direct daily involvement with a large multinational client on the investigation, remediation and redevelopment of a 1,500-acre rural site that had more than a century of industrial activities including mining, mineral processing and complex organic and inorganic chemical manufacturing. The client knew virtually nothing about the site history as it had been acquired through various acquisitions and divestitures. We have successfully negotiated a voluntary cleanup agreement with the state through its brownfields program and are in the process of achieving no further action status on various sections of the site to allow redevelopment for beneficial reuse.
- Conducted compliance audits and negotiated several pre-closing agreements with state environmental agencies and U.S. EPA to allow our clients to acquire operations that have ongoing compliance issues without shutting down the operations or imposition of civil penalties in exchange for the client’s commitment to promptly achieve compliance.
Frost Brown Todd’s EPG has the experience and resources to assist in virtually any environmental issue that arises in the purchase and sale of real estate or business operations.