Considering comfort letters and prospective purchasers’ agreements

My response is what it has been for my entire career — Caveat Emptor. Buyer Beware.

Lawyers argue. Actually, it is a function of argument that actually sharpens lawyers’ thinking and enables us better to represent our clients. Often times, after a vigorous internal argument with my partners, I am better prepared to anticipate opposing counsel’s position.

Recently my partner, Matthew Cohn, and I attended a conference discussing the new vapor intrusion (VI) standards and related risked-based cleanup objectives. Matt came away disillusioned, suggesting that perhaps we can no longer rely on historic risk-based closures letters issued by the states. Indeed, most states have risk-based closure programs with local acronyms (e.g., Indiana has the Risk Integrated System of Closure known as “RISC”; Texas has the Risk Reduction Standards).

My response is what it has been for my entire career — Caveat Emptor. Buyer Beware. These comfort letters and agreements, in whatever form and from whatever forum, are just information. It has always been true that these comfort letters and agreements are not any more final than the likelihood that new data will be discovered to replace the information that had been generated to obtain the letter in the first place. If the original information provided to the agency was errant, then the comfort letter or agreement with the agency is revocable based on additional, correct information.

Every comfort letter and agreement says so. Every Consent Order and Settlement Agreement or Compliance Commitment Agreement with any agency has “re-openers” — language that allows the agency to reconsider the closure it reportedly confirmed. Owners of environmentally challenged property, and their lenders, solicit such letters and agreements for their files because they believe that these letters will keep the environmental enforcers away in the same way that garlic keeps vampires at bay.

Contributing Author

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William J. Anaya

Bill Anaya is an environmental Lawyer licensed in Illinois and Indiana and heads Arnstein &...

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