Protecting Lender's From the Environmental Risks of Real Property Collateral Security
Ms. Jane E. Ballerini, an associate with the New Haven law firm of Neubert, Pepe & Monteith, P.C., was a panelist at The Risk Management Association (RMA) Women in Banking luncheon on Wednesday, April 9, 2014 in Hartford, CT. Ms. Ballerini was joined by Mr. Derek Ezovski, principal of Outsourced Risk Management Solutions and Ms. Melanie Joe, senior vice president, Rockville Bank to discuss environmental issues associated with commercial real estate. Ms. Ballerini's presentation, "Using The Environmental Indemnity Agreement To Protect Lenders From Environmental Issues Arising With Commercial Real Property Collateral," addressed the varied legal documentation needed to protect commercial lenders against environmental issues that may arise with commercial real estate collateral. Ms. Ballerini further discussed how lenders can limit their potential liability by finding and implementing the secured party exceptions or "safe harbors" in local and federal environmental laws.
Before a full room of mostly female lenders from the tri-state area, Ms. Ballerini focused on the baseline risks when lending against property that has potentially risky environmental issues. "What lenders really care about in this increasingly complicated environmental arena is simple. First, what are their real risks and second, what can they do to limit their risks?" Ms. Ballerini stated, "Lenders want practical questions answered. How far can a lender legally push the limits of their protection through an Environmental Indemnity Agreement?" After reviewing viable methods of limiting lender risks (i.e., pre-closing due diligence, loan documentation, adequate monitoring of the borrower and property throughout the course of the loan, and, post-default pre-foreclosure due diligence) Ms. Ballerini deconstructed the Environmental Indemnity Agreement (EIA) and gave lenders a list of issues in a typical EIA that they should expect a borrower to contest. She provided lenders with the framework to negotiate with diligent borrowers and their counsel in reasonably circumscribing the rights and remedies granted to lenders under an Environmental Indemnity Agreement.
Ms. Ballerini practices in the areas of real estate, commercial finance and commercial and business law. She represents banks and other lending institutions in real estate-based financings and other forms of asset-based lending, including lending through the U.S. Small Business Administration's 504 loan program. Ms. Ballerini is admitted to practice in the State of Connecticut state and federal courts.
About Neubert, Pepe & Monteith
Neubert, Pepe & Monteith, P.C. is a general practice law firm with offices in New Haven and Fairfield Connecticut (www.npmlaw.com). The firm, founded in 1993, presently has twenty-five attorneys, many of whom are leaders in their respective fields and have been listed in Best Lawyers in America and the Connecticut, New England and New York Tri-State Super Lawyer's lists. Neubert, Pepe & Monteith's core practice areas are Professional Malpractice & Liability Defense, Litigation & Appeals, Healthcare Law, Bankruptcy, Commercial Finance & Banking, Real Estate, Construction Law, Employment & Pension Law, Taxation, and Trusts & Estates.