Successor Liability of Financial Institutions Under CERCLA – A Takings and Policy Analysis

Friday, January 1st, 1988 at 12:00 am by Mark J. Thurber
Mark J. Thurber, Successor Liability of Financial Institutions Under CERCLA – A Takings and Policy Analysis, 1988 Colum. Bus. L. Rev. 243

The Comprehensive Environmental Response, Compensation and Liability Act (‘CERCLA’) was enacted to deal with the problems of cleaning up hazardous waste disposal sites, and assessing liability for the associated costs. Liability under CERCLA has been imposed not only on owners who pollute their property, but also in some instances on lending institutions which foreclose on polluted property. This result has created much concern in the banking community, particularly because cleanup costs may exceed the property’s value. The banks’ most serious concern is not merely that the Environmental Protection Agency (‘EPA’) might on occasion impose cleanup costs on a bank. Rather, they fear that such charges for cleanup may become a regular cost of doing business. Where commercial hazardous waste sites are encumbered by mortgages, the financing party may be liable for associated clean up costs if the mortgagor defaults.

Author Information