Environmental Issues In Business Transactions

Environmental Issues In Business Transactions

The Hunton & Williams LLP Environmental Team has extensive experience handling environmental issues in all types of business transactions. We represent buyers, sellers, lenders, investors, underwriters and others in assessing the environmental risk associated with a transaction and structuring the transaction to appropriately allocate the risk.  We have represented clients in a wide range of industries including coal-fired cogeneration, hydroelectric power, synthetic fuel, waste-to-energy, electric transmission and distribution networks, gas distribution networks, paper manufacturing, rail and bus transportation facilities and chemical manufacturing.

Our attorneys regularly orchestrate all phases of environmental due diligence to identify the environmental risks associated with a transaction. We assist clients in evaluating the environmental risk by assessing liability issues such as onsite and offsite clean-up liability, toxic tort exposure and regulatory risk. We also evaluate any restrictions and permitting requirements on the intended uses or development of the subject property. Once we have identified the environmental liabilities associated with the property, we assess the risk by, for example, examining relevant agency and company documents, analyzing from a legal perspective the results of Phase II sampling, and meeting with appropriate environmental regulators or site personnel. After assessing the liabilities, we assist our clients in structuring the deal to allocate the risk in a manner that is most advantageous to our client. We have broad experience drafting and negotiating the environmental contractual provisions (including complex environmental representations and warranties, covenants and indemnity provisions) necessary to successfully conclude a transaction. Our lawyers also routinely negotiate permit modifications in advance of closings.

In addition, we help our clients implement and manage processes for resolving environmental indemnity claims associated with asset purchases. We also advise clients on related issues involving the disclosure of environmental liabilities in securities filings. We have negotiated numerous Brownfield Agreements with state and federal agencies. We also have significant experience identifying and negotiating complex environmental insurance policies that may be necessary to provide the appropriate level of comfort to the parties to a transaction.

Relevant Experience
We have advised clients in the following representative transactions:

  • Served as sole environmental counsel to parties to the second largest IPO in US history on all aspects of environmental disclosure in securities filings, and advised related purchaser on environmental risk associated with the acquisition.
  • Advised equity investors on environmental issues associated with domestic and cross-border lease transactions involving a broad spectrum of industries including electric power generation, chemical manufacturing, and global transportation facilities.
  • Advised equity investors on maritime pollution liability risk involving OPA, the Clean Water Act and MARPOL in connection with lease financings of vessels, tankers and mobile offshore drilling units.
  • Represented global automotive parts manufacturer on all environmental aspects of $2 billion acquisition of competitor with several hundred manufacturing facilities in the US and abroad.
  • Represented purchaser in acquisition of preferred and common stock of publicly traded manufacturing conglomerate owning and operating more than fifty industrial facilities in North America and the United Kingdom and assisted purchaser in negotiating requisite credit facility with lending syndicate.
  • Represented lead lender in refinance of $350 million credit facility for publicly traded athletic apparel manufacturer secured by fifteen major manufacturing and distribution plants.
  • Represented global chemical manufacturer in connection with the administration and defense of environmental indemnity claims totaling more than $100 million arising from the purchase and sale of manufacturing facilities in the US and abroad.
  • Represented public utility holding company in $440 million financing of four gas-fired electric generating facilities.