Legal Blog

M&A Nugget: Environmental Matters

Purchasing a business that handles hazardous waste or substances raises the “proceed with caution” sign.  A purchaser first needs to identify whether its target engages in a business that does present environmental concerns.  The existence of environmental issues is obvious in some businesses (for example, gas stations and salvage yards).  Environmental issues may not be as obvious but are still important to address in other kinds of businesses (for example, printing companies and health care providers).  Once the purchaser has determined that the target is engaged in a business that presents environmental concerns, due diligence should be conducted which includes at least a phase one environmental report.  Due diligence should also include verification of whether the seller has maintained environmental insurance.  The purchase agreement should contain environmental indemnification obligations unlimited in amount.  One of the most common post-closing disputes between purchasers and sellers is the resolution of an environmental problem.  By taking the above steps, a purchaser can minimize its exposure.



If you have any questions about this or any other M&A issue,
please contact Glenn Solomon at or 443-738-1522.



Glenn D. Solomon is a principal at Offit Kurman and has provided counsel to businesses and business owners for more than twenty-five years. He has extensive experience in the purchase and sale of businesses, structuring ownership agreements, and advising companies in financial distress.









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