Engaging Buyers, Sellers, and Insurance Markets

Antea^®Group was retained by a bankruptcy trustee responsible for divesting assets of a 169-facility convenience store chain to build an environmental risk transfer strategy designed to quantify and cap the liabilities.

Antea Group evaluated the portfolio of sites to define the current status of previously reported environmental incidents, determine future activities required to bring active incidents to regulatory closure, estimate projected spending necessary to achieve regulatory closure, and identify cost recovery opportunities.

Once the portfolio evaluation was complete, Antea Group worked with the insurance markets to design insurance products capable of guaranteeing the quantified liabilities. These products consisted of a Remediation Cost Cap and a Pollution Legal Liability policy intended to ensure against potential cost over-runs associated with the remediation of active environmental incidents, the potential discovery of pre-existing undiscovered incidents, third party bodily injury and property damage claims, and regulatory re-openers. In addition, a third policy was purchased to cover the potential discovery of incidents proven to have occurred post-closing.

Antea Group partnered with the client, as well as the portfolio buyer, to develop policy language and a remediation contract acceptable to all stakeholders. As a result, the Remediation Cost Cap policy was set up using a finite risk structure, allowing the liabilities to be pre-paid from the proceeds of the sale such that future management would be entirely the responsibility of Antea Group and the insurance underwriter and enabling the client to walk away from liability uncertainty.