Garden Grove, CA

Seller’s Challenge

The Seller’s family had leased the property to a commercial dry cleaning facility for over 50 years. After the tenant spent over $500,000 attempting to comply with Cleanup and Abatement Orders, the tenant ran out of money and discontinued all efforts. The Seller was in poor health, and could not take the stress of dealing with a large remediation project. The local Regional Water Quality Control Board demanded additional remediation activities, and threatened heavy fines, penalties and potential criminal prosecution. Estimated remediation costs exceed $2.8 million.

Hyperion Due Diligence

During escrow, Hyperion conducted substantial insurance archaeological investigations, and was able to find several insurance policies that insured the tenant for the sudden and accidental release of hazardous materials. Hyperion filed suit against the former tenant, which triggered insurance coverage.

Hyperion Solution

Hyperion closed escrow after analyzing remediation options and determining the probability of receiving funds from the former tenant’s insurer. Hyperion filed suit against the former tenant, which triggered insurance coverage. A Remediation Work Plan has been prepared, and Hyperion is working with the Water Board and insurance company on a path to obtain a No Further Action Letter. The insurance company is actively conducting remediation activities and working with the Water Board. The environmental liability to the Seller has been minimized. Hyperion continues to meet its environmental obligations while the State Water Resources Control Board monitors the insurance company’s progress toward full remediation.