Disclosure of Environmental Liabilities

Companies whose stock is traded on public stock exchanges in the United States are required to file certain reports with the federal Securities and Exchange Commission (SEC) disclosing information that would be material to investment decisions.  In addition to the SEC requirements, the Financial Accounting Standards Board of the Financial Accounting Foundation (FASB) has established standards for disclosing contingent losses. Regulated entities who fail to make the required disclosures or fail to make amendments to prevent prior disclosures from becoming misleading can be subject to civil or criminal enforcement actions.  Moreover, shareholders and investors may bring private actions against registrants for losses caused by misleading statements or omissions of material information.

During the past few years, the SEC and FASB have been tightening their guidelines for contingent environmental liabilities. These new interpretations are not only requiring greater disclosure of environmental liabilities but also require companies to begin reserving environmental liabilities that may be associated with assets prior to the time that those plants are shutdown. As a result, many companies now have increased motivation to sell environmentally-impaired properties.

We can help clients determine what environmental liabilities need to be disclosed and guide clients in how to disclose those liabilities. Moreover, we have had considerable experience using the new regulatory reforms such as voluntary cleanup agreements and cleanup trust funds to minimize the kinds of environmental liabilities that need to be disclosed .

Epa Audit Policy

Click on this link to download copies of the EPA Audit policies and forms for voluntarily disclosing results of an environmental audit.