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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: James Strauss who wrote (6626)	7/4/1998 2:52:00 AM
From: James Wright	Read Replies (1) \| Respond to of 29382

Jim -- Thanks for your response. As an attorney, I have seen so many of those boilerplate contract terms that it's not even funny. Bottomline: They do not shield a company from successor liability or current-owner liability to the government or any other party. As a general matter of law, a company cannot contract away its environmental liability as the owner of contaminated property, although it can insist that the primarily responsible party provide indemnification for any clean up costs. Unfortunately, however, an indemnification is only as good as the financial strength of the company giving the indemnification. Usually, that company only exists on paper, with limited assets, after its facilities have been acquired by a company like RECY. I'm not at all trying to be negative regarding RECY in particular. It's just that I've seen too much about the problems facing the metal recycling industry in general, and in fact years ago represented companies that are in that business. And this is not saying that metal recyclers today are doing anything wrong -- its just that they often inherit problems created decades ago before anyone understood what was happening. Thus, I don't have any confidence that a particular company can escape the general problems that have beset that industry as a whole. Finally, keep in mind that most recycling companies are forced to use existing facilities that go back decades because they cannot overcome opposition from communities that will not allow them to open new facilities. Let's face it, recycling facilities are not something you want next door. Thus, it is very hard for companies to escape lurking environmental liabilities from those older facilities that operated before current environmental controls were put in place. Hope this helps. -- Jim