A lender or secured creditor for a debtor who has toxic waste on its property can be held liable for clean-up in the event of foreclosure if it participates in management of the debtor's facilities.

Question

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Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), a lender or secured creditor can be held liable for environmental clean-up if they participate in the management of a debtor's facility and the facility is contaminated with hazardous substances. This is because such participation can lead to the lender being considered an "operator" of the facility, thus bearing responsibility for contamination issues.

A Lender or Secured Creditor for a Debtor Who Has