Anticipating Post-Closing Environmental Issues in Real Estate Deals

Managing and Avoiding Post-Closing Consequences; Setting the Rules of Play

Recording of a 90-minute CLE webinar with Q&A


Conducted on Tuesday, February 28, 2017

Recorded event now available

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Program Materials

This CLE webinar will provide guidance to counsel for buyers, sellers and lenders in real estate transactions on structuring provisions that address post-closing environmental issues to ensure coverage for environmental liabilities. The panel will examine key provisions and lessons from recent court treatment of such provisions.

Description

Real estate transactions present the potential for significant environmental liability. The allocation of those liabilities is often central to how the deal terms are negotiated. Careful drafting of the contract provisions addressing allocation of liability is essential.

Counsel must anticipate issues that may arise after closing due to the seller’s continuing obligations regarding environmental remediation. If the buyer assumes responsibility and later learns that the due diligence conducted prior to closing didn’t accurately represent the state of the property, then the parties face another set of problems.

While in negotiations, the parties must determine at what point in the process should allocation of environmental liabilities be determined. Parties can negotiate the issues up front before the deal is done or they can wait until after closing and litigate after problems arise. If the deal is on shaky ground, the parties may postpone the liabilities allocation battle so that the deal can get done. Who is supposed to pay for what? How will post-closing issues be resolved?

Another issue that the parties and their counsel should consider is that, when dealing with a bank, there are often conditions that are attached to the loans. Environmental issues that arise post-closing may affect whether those conditions are met. The parties should anticipate the implications of that possibility.

Listen as our authoritative panel examines environmental issues that may arise post-closing of a real estate transaction, including cost allocations, insurance, implementing indemnity provisions and dispute resolution. The panel will offer best practices for structuring transactions to minimize the likelihood of post-closing conflicts and to set the rules of play prior to the liability allocation fight.

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Outline

  1. Determining when to have the liability allocation fight—during contract negotiations or after the deal is closed?
  2. Addressing post-closing environmental issues in contract negotiations
    1. Who pays for what
    2. How will disputes be resolved
    3. Post-closing escrow agreements
  3. Dealing with banks (and their conditions on the loans post-closing)
  4. Best practices

Benefits

The panel will review these and other key issues:

  • When is the seller’s obligation to remediate any environmental contamination done?
  • What are the key provisions of the post-closing escrow agreement? Why is it essential?
  • What are the important lessons from recent court decisions for addressing post-closing issues when structuring agreements?
  • What are best practices for allocating environmental risks in real property transactions?

Faculty

Daniel A. Cantor
Daniel A. Cantor

Partner
Arnold & Porter Kaye Scholer

Mr. Cantor has combined his dual training and experience as an environmental lawyer and a litigator into a broad-based...  |  Read More

Karlson, Cindy
Cindy J. Karlson

Founder
Law Offices of Cindy J. Karlson

Ms. Karlson focuses on environmental and land use law, including compliance counseling, transactional work,...  |  Read More

Landers, Daniella
Daniella D. Landers

Partner
Reed Smith

Ms. Landers focuses her practice on a broad range of environmental compliance, transactional and litigation matters....  |  Read More

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