Managing Environmental Liability and Litigation Risk in Business Transactions

Navigating environmental risk in deal transactions is a multi-faceted endeavor. It requires an in-depth understanding of several moving parts that together comprise environmental liability risk for any business concern involved in a deal, including: a panoply of environmental law and regulation in the United States and those of other countries where transactions involve international assets and corporate entities, the potential magnitude of site contamination or regulatory non-compliance risk at play in comparison with a deal's size, and the practical realities associated with impacts on development or operating costs and timeframes. Proper allocation of risk as between buyer and seller, target and acquirer and lender and borrower is, at its base, an exercise in liability/litigation risk management. An awareness of the modern tools for environmental due diligence investigations, third-party risk transfer mechanisms, is key to effective management of those risks.

Using several case studies as examples of deal types, two veteran attorneys from Kelley Drye & Warren's Environmental Practice Group, Michael Dobbs and Steven Humphreys, take an in-depth look at how to effectively identify and approach environmental concerns in a variety of deal settings so that it does not get in the way of a timely deal signing and closing.

Learning Objectives: 

1. Understand the legal landscape that drives environmental liability risk in deal transactions
2. Tailor due diligence efforts to relevant risks based on deal type (e.g., real estate, asset, equity, debt) and size

3. Gain insight on options for achieving effective contractual risk allocations quickly and efficiently

4. Identify the modern innovative tools for shifting risk to third-party vendors (e.g., insurance and guaranteed remediation contracts)

5. Grasp how to minimize potential liability and litigation exposure for cost recovery, personal injury and property damage claims and to preserve rights to pursue cost recovery claims against other responsible parties