Voluntary Disclosure of Environmental Violations in the Transactional Context

July 16, 2012
Brett Slensky
Association of Corporate Counsel's "Green-house Counsel"

It is not uncommon for a Buyer's pre-acquisition due diligence of a facility to ferret out actual or suspected violations of federal environmental requirements. Depending on the terms of the deal, Buyer’s counsel may be comfortable with their client accepting the post-closing responsibility to address some or all of the identified issues, and the associated risk of an enforcement-related penalty. In these cases counsel should be aware that the U.S. Environmental Protection Agency ("EPA") has developed a policy that offers favorable treatment to entities that identify, correct and disclose violations to EPA under certain circumstances, including the transactional context.

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