1A Environmental Law Practice Guide § 7.05

Summary

• [1] The Secured Creditor Exemption in General

  Environmental cases addressing the liability of a lender or secured creditor for the hazardous waste activities of its debtor have arisen under CERCLA. These cases turn in large part on the courts’ interpretation of statutory language defining liable parties.

  CERCLA holds both current owners and operators of a hazardous waste disposal site, as well as those who were owners and operators at the time of disposal, liable for cleanup costs.143 As stated, the statute excludes from the term “owner or operator,” “a person, who, without participating in the management of a vessel or facility, holds indicia of ownership primarily to protect his security interest in the vessel or facility.”144

  The courts considering the application of this exemption for secured creditors have addressed two issues: (1) whether the exemption applies when the secured creditor takes title to the secured property, either ...