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7. CARVE OFF CONTAMINATED AREAS

While structuring the transaction, remember that hazardous waste liability is triggered by ownership or operation of a contaminated site or facility. If you do not want the liability, do not own or operate the dirty site. Instead, think of carving the site into separate parcels (by a legal subdivision if necessary) and simply buy only the clean property. Or lease the clean part of the premises, not the dirty part. Or lease only the surface of the floor and the space above. Or lease only the upper floors. Or buy only an easement or air rights. Prospective purchasers should consider avoiding environmental liabilities by purchasing only clean assets.

Remember also that liability attaches to those who arranged for transportation, treatment, or disposal of hazardous wastes. If one does not want the liability for formerly-generated wastes (wherever they are now), do not buy the company. Buy only the rights to sell the product. Or only loan funds to the operation, taking back only principal and interest. Or create a new corporate subsidiary for the clean part of the operation, and buy only it.

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