Commercial Transactions
We routinely advise clients on environmental and natural resource issues associated with a broad range of commercial transactions, including real estate transactions, commercial lending, asset purchases, project development, brownfields redevelopment, and mergers and acquisitions.
Our Environmental & Natural Resources Practice Group has extensive experience in performing the due diligence required to identify and assess potential environmental risks associated with commercial transactions. Once the environmental risks are evaluated, we assist clients in limiting their potential liability by drafting and negotiating appropriate contractual representations, warranties, indemnities, and other provisions necessary to allocate those risks properly. We have closed many deals successfully that involved actual or potential environmental liabilities by using creative mechanisms tailored to the individual transaction, including negotiating adjustments to the purchase price, carving out contaminated portions of property, establishing financial assurance for assessment and remediation costs, securing insurance, and drafting appropriate environmental indemnities.
We represent a wide range of entities in commercial transactions, including:
- Real estate developers
- Institutional lenders
- Manufacturing companies
- Regulated utilities
- Independent power producers
- Telecommunications companies
- Retail chains
- Multinational mining companies
- Oil and Gas producers and distributors
We have provided counsel for transactions in more than thirty States and twenty foreign countries. The range of clients served and the broad geographical reach of our practice has enabled us to gain valuable insight into the business practices and substantive law in widely varying jurisdictions. We apply this experience to our clients' advantage, managing the environmental aspects of transactions efficiently and effectively.
Asset Purchases, Mergers and Acquisitions
The purchase or sale of business assets and the acquisition or divestment of business units typically requires careful consideration of environmental liabilities associated with the transferred assets or stock. In cases involving the transfer of property which has been used for industrial or commercial purposes or which is located in proximity to such, the potential environmental liabilities can be a central factor in the transaction. The starting point for evaluating potential liabilities is effective due diligence. From working with a broad range of clients on regulatory, litigation, and transactional matters, we are familiar with a wide variety of industrial and commercial operations and, as a result, are positioned to perform thorough, but cost-effective due diligence. If liabilities are identified our attorneys can fashion transactional provisions which allocate those liabilities with two primary goals in mind - to protect the client and to close the deal.
Sample representations in the purchase and sale of assets or stock include:
- Representing a transportation company in the acquisition of more than 90 properties in the United States and Canada. Perform environmental due diligence, expedited the transfer of facility permits, and drafted and negotiated environmental terms of the asset purchase agreement;
- Serving as environmental counsel to a pulp and paper company in the asset purchase of an inactive paper mill. The transaction involved transferring numerous environmental permits and obtaining concurrence from regulatory agencies that restart of the mill would not trigger new source review under the Clean Air Act's Prevention of Significant Deterioration program;
- Representing a large investor owned utility in connection with its purchase of three non-utility generators, including successfully assisting the company in complying with Title IV of the Acid Rain Program on a very accelerated schedule;
- Assisting a Fortune 100 heavy equipment manufacturer in acquiring the stock of a French-owned tractor company and a heavy equipment manufacturing and distribution company located in Brazil;
- Providing counsel to an independent power producer in the acquisition of an interest in the government-owned power generation facilities of Trinidad and Tobago. Activities included commissioning and evaluating Phase I and II Environmental Site Assessments and, as part of the transactional documents, developing site remediation criteria consistent with United States and World Bank standards;
- Representing a large utility holding company in the $1.8 billion acquisition of a utility in Southwest England and a $2.7 billion acquisition of the largest independent power producer in Asia; and
- Providing counsel on asset purchase of flax mills located in the United States, Canada, and France in connection with the spin-off of the specialty products division of a paper products company.
Real Estate Transactions
We advise domestic and international clients on transactions involving the acquisition, development, management, operation, and sale of commercial real estate. The transactions typically place substantial emphasis on environmental site assessments. We assist clients in identifying and selecting qualified site assessment contractors, drafting appropriate consulting and confidentiality agreements, and evaluating environmental site assessment reports. Based upon the results of the environmental due diligence, we assist clients in allocating potential environmental liabilities satisfactorily.
Our experience in the field of real estate purchasing, sales, and leasing includes:
- Advising a national real estate development group concerning environmental due diligence related to the acquisition of hotels and associated properties across the Southeast and Midwest;
- Assisting a major real estate developer in identifying and mitigating environmental risks in connection with the purchase of numerous properties developed for and leased to a national drug store chain;
- Counseling a property management firm on the legal liabilities and project requirements related to asbestos management, lead-based paint removal, radon, and indoor air quality;
- Drafting ground lease provisions concerning environmental conditions and inspection obligations for a national food chain;
- Conducting environmental due diligence for a major telecommunications company in connection with the purchase or lease of telephone signal transmission sites; and
- Counseling an international fast-food chain in the acquisition of new sites, including reviewing and commenting on environmental site assessments, drafting contractual provisions to address potential environmental liabilities, and negotiating corrective action plans where necessary.
Lending Transactions
We counsel lenders on the environmental liabilities involved in taking environmentally-impaired property as collateral, and we represent borrowers seeking to use contaminated property as collateral. Likewise, we assist lenders and borrowers in selecting qualified consultants and contractors, negotiating and drafting environmental consulting agreements and confidentiality agreements, and counseling consultants and clients on various aspects related to the confidentiality of audit findings. We also provide counsel to lenders and borrowers on the legal requirements involved in the foreclosure of contaminated property and the discharge of environmental expenses in bankruptcy proceedings.
Examples of our environmental lending experience include:
- Counseling an international lender with respect to environmental issues related to a $20 million loan to joint venture textile manufacturers with facilities in five Southeastern States;
- Representing a European lender in evaluating environmental liabilities related to foreclosure on equipment at a pulp and paper mill;
- Negotiating on behalf of a lender and obtaining approval of the U.S. Environmental Protection Agency, the U.S. Department of Justice, and the Georgia Environmental Protection Division for the sale of a mortgage on property listed on the Georgia Hazardous Site Inventory;
- Drafting and negotiating environmental provisions on behalf of a borrower in $900 million credit agreements for purchase of electric generating power plants in China and South Asia;
- Evaluating for a lender the environmental and land use implications of farm property, containing nitrate-contaminated groundwater, used as collateral;
- Counseling loan officers at a financial institution on appropriate environmental due diligence for low-capital loans;
- In the workout of a problem loan, counseling a lender on probable remediation requirements and costs involved in installing and operating a groundwater treatment system; and
- Counseling a lender on disclosure obligations related to knowledge of contaminated groundwater beneath real property securing a mortgage.