The Sherman Law Firm counsels commercial banks, mortgage lenders and brokers, and others institutions lending money on contaminated property. The Sherman Law Firm can assist banks, lenders, and others institutions by advising on all phases of the commercial loan process including:
- Development of policies and procedures for screening the environmental risks of site-specific and pool loans;
- Packaging for re-sale into the Commercial Mortgage-Backed Securities (CMBS) market;
- Development of future environmental cost projections for the purposes of sizing any required environmental escrow; and
- Counseling lenders on preservation of the “secured lender” exemption under federal and state law.
Secured Creditor Exemption under Federal and State Laws
Lenders who conduct themselves in accordance with the “secured creditor” exemption are protected under federal and state law from environmental liabilities. However, lenders must observe a carefully prescribed regime of conduct in order to maintain the secured creditor exemption including:
- Lenders can “police” the loan including ordering borrowers to perform environmental testing, to clean up contamination, and to engage in work-out;
- Lenders cannot “directly participate” in the management of the facility located on the property;
- Lenders cannot take over decision making with regard to the operations or hazardous waste management and disposal matters;
- Lenders can foreclose on contaminated property and still maintain the secured creditor exemption against environmental liabilities but must divest the property at the “earliest commercially reasonable time” as defined at 42 U.S.C. 9601(20)(E)(ii).
The Sherman Law Firm LLC
92 Park Street
Montclair, New Jersey 07042
Telephone 973-783-0284
Facsimile 973-783-0285
Email
www.theshermanlawfirm.com
© 2006 The Sherman Law Firm LLC.
All Rights Reserved.
