Source: Great American Environmental Division, May 2013
A large Financial Institution (FI) entered into a settlement agreement where the FI agreed to reimburse the USEPA for $1.28 million in removal costs incurred at a former wood processing facility. The FI was the successor to the trustee who had held title to the property while the wood treating operations had resulted in releases of hazardous substances. Although the secured creditor exemption of CERCLA provides liability limitations, it does not extend to a fiduciary who negligently causes or contributes to a release. Given the length of time that the spills occurred, the risks posed by the contamination and that the hank had been notified by the USEPA about the contamination, it is possible the bank could have been exposed to potential contribution actions by other responsible parties. In an effort to limit their exposure to additional third-party claims, the FI entered into the settlement agreement with the USEPA which encompassed covenant not to sue and contribution protection.