Posted in: Bi-Weekly Receivership Education, Environmental Receiverships

Using Receiverships to Help a Lender on a Distressed Environmental Asset Avoid Liability

Secured lenders are hesitant to foreclose when environmental problems exist, based on concerns about CEQA, CERCLA, or other environmental issues, because they may be deemed an owner or operator. However, lenders can avoid these concerns by seeking the appointment of a receiver for the distressed property. California Civil Procedure (“CCP”) § 2929.5 & 564(c) authorizes lenders to inspect property to assess the existence and magnitude of hazardous substances and environmental issues. If there are significant