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Mergers and Acquisitions

Mergers and Acquisitions ◦ Environmental Law ◦ Transaction Consulting

Too often, corporations engaged in mergers and acquisitions do not identify significant environmental problems until fairly late in the process – frequently only at the "due diligence" stage. Norman Bernstein believes in an approach (analogous to tax planning) that identifies environmental issues early and then structures the acquisition to minimize the risks.

Example: Company A wanted to buy coke ovens to obtain a long term reliable source of coke to be used in the manufacture of iron and steel. Environmental reviews showed problems. The deal was re-structured as a long term tolling agreement with guaranteed coke deliveries at guaranteed prices. An acquisition of six related companies included one that had significant environmental risks. The deal was re-structured to provide for the acquisition of only five companies and the purchase of selected production assets (no accounts or receivables and only a limited number of personnel) of the sixth company and the establishment in another state of a greenfield manufacturing plant to replace the main plant of the company not acquired.

In our view simply doing "Phase I" study of real estate contamination is not enough. A company's competitive position, future cash flows and balance sheet can be affected (positively or negatively) by existing and importantly upcoming environmental regulations that may be specific to an industry or may be universally applicable but have different potential effects on different geographic regions or industries. For example recent tightening of ozone standards will result in new regions of the country being designated as ozone "non-attainment areas" (meaning they don't attain National Ambient Air Quality Standards under the Clean Air Act.) That, in turn, may make it more difficult to obtain air emission permits in those regions in the future. Likely upcoming carbon emission limits will have an effect on industries relying on coal and oil fired boilers).

Additionally, Norman Bernstein's background in securities and antitrust laws enhances the law firm's ability to facilitate all facets of environmentally sensitive mergers and acquisitions. For example, working with Venture Capital firms, Mr. Bernstein has developed a structure for minimizing investor risk while preserving most of the "up side" of stock ownership. Call or e-mail the law firm to consult with us regarding a merger, acquisition, or other investment with environmental risk.

Firm News & Articles

For Norm Bernstein's views on the CERCLA 107/113 issue as expressed in the "Voluntary vs. Compelled Cleanup" section of the recent Bloomberg BNA article (p. 2) titled "Finding the Divide Between CERCLA Cost Recovery and Contribution Actions," click here. Reproduced with permission from Toxics Law Reporter, 30 TXLR 235 (March 5, 2015). Copyright 2015 by The Bureau of National Affairs, Inc. (800-372-1033) < http://www.bna.com>

On January 27, 2014, the Supreme Court of the United States denied a petition for certiorari that sought to overturn our defeat of DOJ's arguments in the Seventh Circuit in Bernstein, et al. v. Bankert, et al. For the front page article in Bloomberg's Toxics Law Reporter, click here. For the Seventh Circuit's decision, click here.

Office Location

N.W. Bernstein & Associates, LLC
800 Westchester Avenue
Suite N319
Rye Brook, NY 10573-1361

Telephone: 914.358.3500
Fax: 914.701.0707

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