Environmental Exposures and Lender Concerns
Practical Borrower/Bank Issues in Addressing
Environmental Transactional Issues
The measures a party will undertake to address an environmental issue in a
transactional context will obviously depend on:
•
Type of transaction (lease, buy/sell/financing, asset v. stock, etc.)
Party represented (buyer, seller, lessor, lessee, borrower, secured creditor,
investor, etc.)
Type and materiality of the environmental issue in the context of the transaction
Relative leverage of the party (Banks can typically require borrowers to undertake
an assessment if reasonable)
Tools reasonably (cost-effective?) available to allocate responsibility and/or
quantify issue
Party's appetite for risk? (is there an understanding that compliance and/or
agency blessing does not necessarily mean that in the appropriate scenario third
party lawsuits or impacts on future bank financing might be an issue?)
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