Environmental Transactional Services
Environmental Due Diligence and Risk Management in Business Transactions
Adding value by identifying and resolving environmental issues before the deal is done
Virtually every business and real estate transaction involves environmental risks for the purchaser, seller, investor, tenant, or lender. If the deal involves land, old buildings, manufacturing, or materials handling, then environmental problems may exist. Taft’s environmental transactional attorneys understand these risks and use their significant experience to protect clients from environmental risks arising from historic property use or business practices. Taft’s environmental transactional attorneys also understand how to account for environmental liabilities in the negotiation process to help ensure that these liabilities do not erode the value of your business transaction.
Beyond the Phase I
The Phase I Environmental Site Assessment is an important part of due diligence in any transaction, but a full evaluation of environmental risk goes much further. Taft’s environmental transactional attorneys know when additional investigation is required, what questions to ask, and what to do when a problem is discovered. Often, an environmental problem requires a report to a government agency. The business may need an environmental permit, or have long-standing compliance problems. The buyer often needs protection from environmental liability by qualifying for the “bona fide prospective purchaser defense” under the Superfund law. Taft’s environmental transactional attorneys help clients understand the risks both before and after closing. When an environmental issue needs to be resolved quickly, Taft’s environmental transactional attorneys bring their experience to bear to craft efficient solutions. While we cannot guarantee we can obtain permits or accomplish cleanups overnight, we understand what “time is of the essence” means.
Bringing the environment to the bargaining table
Taft’s environmental transactional attorneys work on all types of transactions across a broad spectrum of businesses. We represent buyers, sellers, landlords, tenants, lenders, banks, investors, and private equity firms. In each context, clients value Taft’s counsel in making sure the deal structure and conditions protect them from identifiable environmental risks and contingencies. Taft’s environmental transactional attorneys are included in negotiations, advocating for their clients’ interests. Taft attorneys regularly draft the environmental, escrow, and indemnity agreements that govern cleanups and other environmental obligations after closing.
Managing and not simply avoiding the risk
Sometimes a deal just makes good business sense. Therefore, Taft’s environmental transactional attorneys don’t just identify and evaluate environmental problems. The hallmark of Taft’s environmental transactional practice is finding cost-effective ways to resolve and manage environmental risks so they do not defeat the deal. Solutions may involve allocating risk among the parties, assigning responsibility for cleanup after closing, negotiating an agreement with a government agency, qualifying for a cleanup liability defense, setting up an environmental escrow fund, or obtaining liability insurance. Certainly, we have advised clients against a deal due to environmental problems. But if there is a way to do the deal while protecting both the client and the environment, we’ll find it.
After the deal is done
A new acquisition often includes new environmental responsibilities. Permit conditions must be met, treatment systems must be operated, and environmentally sensitive areas must be properly managed. Taft’s environmental transactional attorneys make certain their clients understand these ongoing obligations. If the deal is a divestiture, Taft attorneys advise the former directors, officers, shareholders, and corporate successors of their ongoing exposure and the appropriate safeguards against environmental risks. In an age when cleanup obligations can follow former owners and operators for decades, these services are indispensable.
Know the territory
Taft’s environmental transactional attorneys have facilitated transactions in every state and around the globe. We frequently work on transactions involving multiple sites and jurisdictions, and we negotiate with the appropriate authorities. But whether a transaction involves one site or one hundred, we’ll bring the same thoroughness and dedication to the table.
- Taft attorneys have provided legal assistance on numerous acquisitions and divestitures involving environmental due diligence, no further action letters, negotiation of stock and asset purchase and sale agreements, merger agreements and negotiations with regulatory agencies to promote the transactions.
- Taft serves as principal outside legal counsel to one of the largest private equity firms that specializes in the acquisition and sale of specialty chemical companies. In that role, Taft works with the environmental, occupational safety and health due diligence professionals to assess risk and then negotiate mutually acceptable terms and conditions to purchase and sale agreements. In addition, Taft assists in the evaluation of long-term latent environmental liabilities and risk, supports quantification of that risk and development of contractual, insurance and statutory protections to allow the parties sufficient comfort to proceed with the transaction.
- Taft represents a large private equity firm that acquires and divests manufacturing facilities. Taft provides the support necessary to assist the environmental, safety and health professionals performing the on-site due diligence and uses creative solutions to box the risk so that the parties are comfortable consummating the transaction.
- Taft represents one of the largest formulators and distributors of agricultural chemicals, and provides support and advice during acquisitions and divestitures when difficult environmental or safety issues arise that threaten the ability to conclude the transaction. • Taft has counseled buyers during numerous acquisitions with respect to CERCLA’s Bona Fide Prospective Purchaser defense, Comfort Letters, Prospective Purchaser Agreements and related liability protection.
- Taft has worked with many qualified environmental, health and safety professionals so that the right consultant can be engaged to assist with conducting, or reviewing, the due diligence for specific transactions or sales.