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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

  • work Practice Area

    Real Property - Finance

Date & Time
  • event Date

    Tuesday, February 15, 2022

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE course will discuss lender liability in real estate loan transactions for environmental cleanup and remediation and how the lender can minimize direct liability and diminution of the collateral's value due to environmental damages. The program will discuss risk mitigation in loan origination and during the life of the loan, including loan workouts and foreclosures.

Faculty

David H. Quigley
Partner
Akin Gump Strauss Hauer & Feld LLP

Mr. Quigley advises lenders, sellers and buyers on evaluating the environmental liabilities associated with commercial, multifamily and industrial transactions. He develops solutions that are cost-effective and realistic for clients (whether lenders, buyers or sellers) relative to the value of the property or portfolio. Mr. Quigley solves problems so that clients can cost-effectively and beneficially use their assets. He has established a strong profile in this space, having developed an environmental due diligence model for use in the foreclosure of commercial properties. Mr. Quigley works closely with clients and other firm practitioners to anticipate changes to the environmental regulatory landscape and assists clients in complying with those changes. He manages the defense of enforcement actions, having done so most recently in the Clean Air Act and Toxic Substances Control Act contexts. Mr. Quigley also resolves, through mutually agreeable settlements where possible and litigation where necessary, Comprehensive Environmental Response, Compensation and Liability Act cost recovery and allocation suits

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Bryan C. Williamson
Attorney
Akin Gump Strauss Hauer & Feld LLP

Mr. Williamson is an environmental and natural resources lawyer, advising and representing clients on a range of environmental regulatory, transactional and litigation matters. His experience extends to issues involving federal and state environmental protection laws, including the Comprehensive Environmental Response, Compensation and Liability Act, Toxic Substances Control Act, National Environmental Policy Act, Clean Air Act, Clean Water Act, Endangered Species Act, Resources Conservation and Recovery Act, California Global Warming Solutions Act (including the Low Carbon Fuel Standard). Mr. Williamson is also a member of the firm’s environmental, social and governance (ESG) practice through which he helps clients understand the business and legal risks associated with ESG and sustainability initiatives.

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Description

While federal law largely shields lenders from environmental liabilities and cleanup costs on indebted properties, lender missteps and poor loan documentation can result in a loss of that protection and put lenders on the hook for environmental remediation.

Environmental hazards can also negatively impact a borrower's ability to repay the loan and decrease the collateral value, which is why it is essential to uncover the hazards before the closing of the loan and formulate a plan, whether a Phase I environmental site assessment or some lesser action.

A critical protection for the lender is an indemnification agreement with the borrower as part of the loan documentation. Other key loan agreement provisions include reps and warranties, covenants, notice provisions, and inspection rights. Another option for the lender is to require the borrower to obtain insurance, usually in a pollution policy.

Lender environmental due diligence at the time of a loan default or workout is also critical as environmental hazards must be considered when assessing the collateral value and a workout plan. Of course, if foreclosure appears imminent, the lender liability must be carefully evaluated as the lender prepares to take possession of the property.

Listen as our authoritative panel of experienced attorneys analyzes lender liability for environmental cleanup and remediation liabilities. The panel will discuss theories of liability and best practices for lenders to minimize direct liability and diminution of the collateral value. The panel will address risk mitigation in loan origination and during the life of the loan, including workouts and foreclosures.

Outline

  1. Theories of liability
  2. Indemnification agreements
  3. Insurance, reps and warranties, loan covenants, inspection rights
  4. Lender's due diligence at the time of loan default, workout, foreclosure

Benefits

The panel will review these and other key issues:

  • What pitfalls do lenders face that may result in lender liability for environmental cleanup and remediation liability?
  • What are the critical elements of environmental indemnity agreements?
  • What are best practices for lenders to evaluate and manage environmental risks in real property loan transactions?