Location: North Central Indiana
Scope: Support of bank in financing a business acquisition
A business succession plan was being implemented that caused the assets of a company to be transferred to an acquiring individual. A Phase I Environmental Site Assessment (ESA) was completed and several issues were identified that threatened the financial viability of the transaction. A Phase II ESA to collect data to determine if impact was present was fast tracked due to time constraints associated with the plan. This Assessment confirmed that groundwater was impacted by tetrachloroethylene. However, the cost of further delineation or remediation exceeded the value of the subject property.
Rather than recommending further investigation into the groundwater impairment, TecServ suggested to posture the corporation in a manner to isolate the environmental liability. These suggestions were implemented by the client’s attorney. Although no further investigation occurred, the recommended action protected the acquiring party and insulated the lender’s interests.