ELR Citation: ELR 20387
No(s). 3-91-0715 (D. Minn. Dec 24, 1992)

The court holds that a lender engaging in ordinary lending activities is shielded from liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and the U.S. Environmental Protection Agency's (EPA's) 1992 lender liability rule. A lender loaned money to a tenant making wood preservatives on property owned by Ashland Oil in St. Paul Park, Minnesota. When the tenant filed for bankruptcy in 1982, the lender became involved in selling the assets to another company. The court holds that routine lending and bankruptcy workout activities do not subject a lender to liability for environmental problems caused by a borrower. Although CERCLA imposes broad liability on owners and operators of hazardous waste sites, it exempts from liability any person who, without participating in the management of a vessel or facility, holds indicia of ownership primarily to protect a security interest in the vessel or facility.

Counsel for Plaintiff
Mark Ten-Eyck
Popham & Haik
222 S. 9th St., Minneapolis MN 55402
(612) 333-4800

Counsel for Defendants
Steven Snyder
9240 Chesshire La., Maple Grove MN 55359
(612) 420-6700