Emsource Chesapeake, LLC - An Emsource Risk Transfer Project
Client: Birmingham Steel Corporation
Location: Chesapeake, VA
Cost Range: $2-5MM
- 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