Publicly-traded companies are required to file certain reports with the federal Securities and Exchange Commission (SEC) disclosing information that would be material to investment decisions including certain categories of environmental liabilities. Regulated entities who fail to make the required disclosures or fail to make amendments to prevent prior disclosures from becoming misleading can be subject to civil or criminal enforcement actions. Companies are also now required to recognize environmental liabilities that may be associated with assets prior to the time that those plants are shutdown. Shareholders and investors are increasingly demanding that companies provide greater environmental disclosure and may bring private actions against registrants for losses caused by misleading statements or omissions of material information. As a result, many companies now have increased motivation to sell environmentally-impaired properties.
We can help clients determine what environmental liabilities need to be disclosed and guide clients in how to disclose those liabilities. Moreover, we have had considerable experience using the new regulatory reforms such as voluntary cleanup agreements and cleanup trust funds to minimize the kinds of environmental liabilities that need to be disclosed.
Environmental disclosure obligations are not limited to publicly-traded companies or corporate transactions. Many states have adopted disclosure laws for residential real estate transactions. Sellers (and their brokers) who fail to disclose certain mandated information or who fail to disclose latent defects may be liable for breach of contract, misrepresentation and fraud. Common environmental issues that have led to such liability have included failure to disclose the existence of a leaking home heating oil tank; presence of asbestos, lead paint, mold, radon and water quality problems.
EPA Audit Policy
Click on this link to download copies of the EPA Audit policies and forms for voluntarily disclosing results of an environmental audit.