Opinion ID: 219231
Heading Depth: 2
Heading Rank: 1

Heading: environmental remediation

Text: After taking possession of the business premises and assets, Greif spent nearly $650,000 to remove and properly dispose of hundreds of barrels of hazardous waste left behind by Evans at several sites. It is not disputed that this cleanup complied with applicable government environmental regulations. Greif attempted unsuccessfully to claim that amount from the holdback. Greif argues on appeal that Evans breached its warranty that the facilities complied with all relevant environmental regulations, and, in the alternative, that the bankruptcy court and district courts misread the relevant portion of the APA in which Evans retained responsibility for environmental cleanup costs that accrued prior to the APA. We reject Greif’s contentions. Insofar as the Peters Road and Houston leases were rejected in Evans’s reorganization plan, and only later, by separate agreement, were resumed by Greif, those premises were not among the assets transferred by the APA. No liability accrues to Evans based on contamination at those sites. As the bankruptcy court explained, the landlords of those sites might have had recourse 4 Case: 10-30387 Document: 00511514885 Page: 5 Date Filed: 06/21/2011 No. 10-30387 to filing a claim against Evans under the terms of the plan, but they forfeited their opportunity. Greif has abandoned any claim as an assignee or subrogee of those landlords. Similarly, the St. Gabriel lease was assumed by Evans and transferred under the APA, after Evans had cured any defaults under the lease by paying the landlord $300,000. At the time Greif acquired the lease, then, it was not in default. Greif contends, however, that its claim is payable under the APA based on (l) Evans’s alleged breach of various environmental warranties concerning Evans’s acknowledged storage of hazardous waste materials and (2) Evans’s retention of environmental liability claims. The critical paragraphs of the APA, § 2.3 and § 2.3.13, however, consign responsibility to Evans but do not say that Greif could engage in remediation on its own initiative and turn over the bill to the holdback fund. We are not persuaded that the lower courts committed any reversible error in their analysis of this issue.