The Texas Supreme Court will hear arguments Thursday over whether the state’s environmental agency has the authority to decide internally who can challenge water discharge permits, in a case closely watched by businesses that say the decision could potentially add significant cost and delay to the permitting process. >>
A team of Haynes and Boone, LLP lawyers, working with attorneys from Shearman & Sterling LLP, assisted Citigroup and Goldman Sachs on state regulatory and environmental aspects of two exchange offers for Energy Future Holdings Corp. (EFH) and Energy Future Intermediate Holding Company (EFIH) for $1.3 Billion in New Notes and an Unsecured Exchange Offer for $124 Million. >>
Purchasers and lessees of commercial or industrial properties know to obtain Phase I environmental site assessments to identify the presence of contamination - so-called recognized environmental conditions (RECs) - because of the very substantial liabilities these conditions may create. >>
In September 2013, the Texas Commission on Environmental Quality updated its guidance on the use of the Texas Environmental, Health, and Safety Audit Privilege Act to reflect changes recently made by the 83rd Texas legislature to allow prospective purchasers of facilities to take advantage of the protections afforded by the Act. >>
Implementing a Sophisticated Remediation Strategy
A large manufacturing company
Our client sought to purchase a property adjacent to its manufacturing facility. The seller offered the property at a discounted price, but would offer no indemnity against potential environmental cleanup problems that could be ascribed either to it or to the prior property owner. Our client wanted the property – but not likelihood of large future remediation expenses.
The Haynes and Boone Solution
We constructed a sophisticated, multi-faceted environmental remediation strategy that offered our client substantial protection against future remediation costs. The strategy had four key elements:
- After conducting all necessary environmental due diligence on the property under Phase I and Phase II environmental testing, we required the property seller to assign to our client the responsibility for potential claims involving possible cleanup issues.
- Before the property sale closed, we entered the property into the Texas Voluntary Cleanup Program offered by the Texas Commission on Environmental Quality (TCEQ). The program affords no cleanup protection benefits to the current property owner, but protects subsequent property owners (in this case, our client as purchaser of the property) against liability for voluntarily undertaking any necessary cleanup actions.
- We sought and secured a rare Municipal Settling Designation for the property, under which any groundwater only has to be cleaned to industrial standards, not municipal drinking standards. This designation requires public hearings and approvals at both the municipal and state levels, and the complex approval process required nearly a year of hard work.
- Following the closing of the property purchase, we filed with the TCEQ a Certificate of Completeness and Correctness stating that our client had begun remediation efforts.
Because of the protection that our four-part strategy provided, our client was able to purchase a property that it needed at an attractive price, and to undertake remediation with assurance against future litigation or regulatory action involving any potential problems.