Month: October 2011

NJ Court Remands Recission of NFA Letter

A New Jerseyappellate division court ruled that a property owner is entitled to have an administrative hearing regarding the rescission of a no further action (NFA) letter by the New Jersey Department of Environmental Protection (NJDEP). In the Matter of Crompton Colors, Inc., No. A-0778-09T1 (App. Div. 10/27/11) In this case, Hartz Mountain Industries acquired …

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The Importance of Hiring an Environmental Consultant For Leaking NYC Heating Oil Tanks

Most buildings in New York City have fuel oil-fired burners to supply heat and hot water. The heating oil can range from #2 oil which is similar to diesel fuel to #6 fuel oil which is heavy and thick. Buildings typically store the fuel in storage tanks located in basements or beneath the sidewalk. The tanks …

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District Court Rules Injunctive Order not Dischargeable Claim

New Mexico had issued an order under its Water Quality Act to abate groundwater contamination eminating from septic field and lagoon on debtor’s property. The debtor argued that since the state was essentially requiring it to pay for the cleanup, the order should be considered a claim that could be discharged under the Bankruptcy Code. …

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Chapter 13 debtor may not avoid cleanup order

A Chapter 13 debtor had previously owned a gas station. After the New York State Department of Environmental Conservation (NYSDEC) issued a notice of violation involving failing to comply with underground storage tanks (USTs) regulations, the debtor filed its chapter 13 petition. In its Statement of Financial Affairs, the debtor disclaimed knowledge of environmental issues …

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NY Ethics Opinion May Erode Confidentiality for Sampling Results

In April 2009, the New York Rules  of Professional Conduct (Rules) for attorneys replaced the New York Code of Professional Responsibility disciplinary rules (Code).  Section 1.6 of the Rules now governs the obligations of lawyers involving confidential information obtained during or relating to representation of a current or former client Rule 1.6(a) provides that a …

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Should a Vapor Encroachment Condition (VEC) Always Be a REC?

In a recent ASTM conference call, several consultants took the position that they could not envision a circumstances under which a “vapor encroachment condition” (VEC) identified pursuant to ASTM E2600-10 would not be a “recognized environmental condition” (REC) pursuant to ASTM E1527-05. I was surprised by this statement and therefore have decided to post about …

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CMBS Lender Kept In Case Over Questions About Environmental Disclosure

The federal district court for the Southern District of New York denied a motion to dismiss filed by Morgan Stanley Mortgage Capital, Inc (MSMC)that it failed to adequately disclose environmental conditions at a shopping center and should not be required to buy back the $81MM loan. This case has some yummy nuggets. In this case, …

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NY Case Illustrates Why Borrowers Should Not Simply Rely on Lender Approval of Phase 1

Lenders have long played a role as “surrogate regulator” in transactions. In many cases, lenders force potential borrowers to investigate suspected contamination and frequently require remediation under state oversight. Borrowers often balk at these requests any may even retain their own independent consultants to try to convince lenders that the work is not required or …

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State Court Decision Ilustrates Dangers of Inadequately Evaluating Neighboring HRECs

The ASTM E1527 Phase 1 standard contains a term “Historic Recognized Environmental Condition” or HREC. The term was added to the standard in 2000 to provide a tool for consultants to help distinguish between properties where there was a release in the past that was satisfactorily remediated with sites that have historic contamination that have …

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