Greg Rogers considers how market-based valuation of
environmental liabilities will begin to impact business mergers
and acquisitions.

Follow link to article by Greg Rogers and to Advanced Environmental Dimensions.

NOTE: Please also sign up for the http://www.advancedenvironmentaldimensions.com/about_us.htm newsletter, where this article was brought to our attention.

Fair Value Measurement and Solvency

As it becomes ever more clear that all environmental liabilities will one day (maybe as soon as 2011) be measured at fair value, now is the time for companies to determine the fair value of their long-lived contingent environmental liabilities and consider the looming impact on their balance sheet. A new article in the ABA Business Bankruptcy Newsletter, Environmentally Insolvent: Fair Value Measurement of Environmental Liabilities Poses Solvency Risk, explores how recent and forthcoming changes in accounting standards could give rise to new legal claims against companies with significant unrecognized environmental liabilities.

NOTE: This information provided by Greg Rogers at www.advancedenvironmentaldimensions.com

On June 5, 2008, FASB released for public comment Proposed Statement of Financial Accounting Standards, Disclosure of Certain Loss Contingencies.  The proposed standard would significantly expand the quantitative and qualitative disclosure requirements for loss contingencies under SFAS 5 and 141(R). The proposed standard would be effective for fiscal years ending after December 15, 2008, and interim and annual periods in subsequent fiscal years.
Responses from interested parties wishing to comment on the proposed standard must be received in writing by August 8, 2008. Interested parties should submit their comments by email to director@fasb.org, File Reference No. 1025-300.

American Bar Association Environmental Disclosure Committee Newsletter, January 2008.

Follow link above from Greg Rogers at www.advancedenvironmentaldimensions.com.

Partial newlsetter pasted below.

MESSAGE FROM THE CHAIR
C. Gregory Rogers

In our last issue, the former chair of the Environmental Disclosure Committee, Jeff Smith, spoke of two different objectives that drive environmental disclosure.

This was taken from the newsletter by Greg Rogers (rogers@advancedenvironmentaldimensions.com) at www.advancedenvironmentaldimensions.com.
SEC Asked to Sanction Chevron for Hiding $10 Billion Liability in Ecuador
On March 25, Amazon Watch asked the Securities and Exchange Commission (SEC) to impose a “substantial” sanction on Chevron for misrepresenting facts to shareholders over a potential $10 billion liability resulting from a class-action environmental lawsuit in Ecuador’s Amazon region. Read Amazon Watch’s letter to the SEC.

This information was taken from the newsletter by Greg Rogers at www.advancedenvironmentaldimensions.com.

Canadian Securities Regulator Issues Guidance on Environmental Disclosure

On February 29, 2008, the Ontario Securities Commission (OSC) issued the results of a targeted review of compliance with National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102), which requires reporting issuers to disclose information about environmental matters in their continuous disclosure (CD) documents. The review covered 35 reporting issuers in the environmental services, industrial products, mining, oil and gas, steel, transportation services, and utilities industries. The OSC report documents findings and recommendations regarding disclosure of environmental liabilities, asset retirement obligations, financial and operational effects of environmental protection requirements, environmental policies fundamental to operations, and environmental risks. Read OSC Findings and Recommendations.

COMMENTARY: The part of teh EPA News release article below that really “hit home” for me was that, “Bankruptcy is not a safe haven to avoid environmental responsibilities,” said Catherine McCabe, principal deputy assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “EPA will keep pursuing companies who pollute the environment.”

Below is an article by Greg Rogers and Miki Mitsunari for the October 2007 issue of Environmental Finance.  Greg Roger’s web site is Advanced Environmental Dimensions and he provides tons of great info about financial reporting requirements affecting environmental decisions.

Prospective Purchaser Agreements (covenant not to sue)

Status, Comfort and No-Action Letters (no further action letter)

Negotiated Cleanup Standards (You Don’t Need a Cadillac Cleanup to Park Your Pickup)

Consent Decree (government version of a settlement agreement)

Lease from Redevelopment Agency

Environmental Liability Acquisition Companies

Indemnities and Releases

Environmental Risk Insurance

Comment: Complete article below is from 1996 but still is a great introduction to strategies for limiting environmental liability.

Great article below.

The reporter, Bennett Voyles, really seems to have done homework about who to talk with. Lots of big players from consulting companies, development companies and insurance companies have chimed in.Ã

I thought the part about, “…..Sarbanes-Oxley and Financial Accounting Standards Board Rule 47 (FASB) are prodding companies into dealing with the problems” was interesting.

Question: Will that free up some of corporately owned parcels that have been stuck in limbo for too long?

Question: Anyone else read this one?