Emsource Chesapeake, LLC - An Emsource Risk Transfer Project

 

PROJECT PROFILE
Client: Birmingham Steel Corporation 
Location: Chesapeake, VA
Cost Range: $2-5MM
Client Objectives:

  • Avoid enforcement action by the regulatory agency and obtain liability relief promised by the State's VRA program, thereby eliminating the risk of regulatory "re-openers".
     
  • Re-focus internal resources on regulatory compliance at operating facilities. Unwind an over-funded reserve.

     

  • Realize latent real estate value of the property in post-remediation condition.

     

  • Transfer responsibility for remediation to a third party that would execute the remedial work plan and implement the long term management obligations. "Fast track" the assessment and clean-up process.

     

  • Cap total financial exposure to remediation, long-term care, and real estate carrying costs. Extinguish balance sheet liability by year-end (four-month deal window), while adhering to conservative accounting policies.
  • Optimize after-tax impact of accelerating remediation and risk management cash flows.


RISK TRANSFER PROGRAM

Category: Steel manufacturing

Risk transfer mechanism: Voluntary Remediation Agreement between Emsource Chesapeake LLC and VA Department of Environmental Quality.

 Project Insurance Limits:

  • Remediation Stop-Loss Limits: $2 million; 5-year program
  • Pollution Legal Liability Limits: $1 million; 5-year program

 

Emsource Partners & Contractors:

  • Trustee: BankNorth Investment Management
  • Third Party Administrator: CEC, Inc.
  • Remediation Engineers: Hart Crowser, Inc.
  • Remediation Contractor: Earth Tech, Inc.
  • Oversight Contractor: ECS, Ltd.
  • Regulatory Consultant: KCI Technologies, Inc.
  • Third Party Administrator: Civil and Environmental Consultants, Inc.
  • Insurance Broker: Marsh MMC
  • Environmental Insurance: XL Environmental
  • Regulatory Agency: Virginia DEQ