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Environmental MVP: Kirkland & Ellis' Walter Lohmann

09 December 2011

A proactive outreach and communication strategy guided Kirkland & Ellis LLP's Walter Lohmann in helping Chemtura Corp. settle environmental remediation obligations at some 100 sites and transition out of bankruptcy with a clean slate, earning him a spot among Law360's Environmental MVPs.

Lohmann heads Kirkland's environmental transactional practice group, the largest of its kind worldwide, which handles a range of environmental compliance and liability matters.

"I'm most energized by the process of taking very complex, very esoteric technical facts and translating them into terms that business people can understand," Lohmann said.

"We demystify environmental liabilities to the point where business people can manage them alongside other issues" such as employee benefits or tax, he added.

Lohmann's skills were on full display in 2010 and early 2011, when he and his team worked with state and federal regulators, property owners and other parties to finalize a litany of agreements to resolve millions of dollars in environmental claims against Chemtura.

Lohmann said Kirkland's work on the matter was distinguished by a proactive approach that involved connecting with all government stakeholders, as well as the owners and operators of the properties at issue, and pursuing settlements.

"Rather than sitting back and waiting to receive claims and battling claimants one at a time, we pursued a big picture strategy that aggressively attacked the resolution of liabilities," Lohmann said.

Ultimately, Lohmann helped secure settlements resolving Chemtura's remediation liabilities at about different 100 sites. Total cash payments were about $68 million — not a small sum, but a major relief for the company, given that the U.S. Environmental Protection Agency's original claim totaled more than $2 billion.

In one settlement, the company agreed to pay $27 million to resolve liabilities at 19 contaminated sites in 16 states, some of which were among the most severe waste sites identified by the EPA. Another arrangement involved a $7 million settlement with the New Jersey Department of Environmental Protection and other entities over environmental claims relating to a site in Harmony Township, N.J. The company also settled cleanup obligations at the Gowanus Canal Superfund site in Brooklyn, N.Y., for $3.9 million.

Lohmann said the settlements struck a balance between providing Chemtura with a means to emerge from Chapter 11 with a fresh start and providing the resources necessary for other parties to address remediation at the sites. The strategy, he said, helped Chemtura focus on business at its active facilities as a restructured company in 2011.

"The highlight was taking a broad swath of legacy liability across the country and navigating a path to an arrangement by which Chemtura was freed of this huge amount of entanglement and backward-looking liabilities, while also putting resolutions in place to assure that arrangements had been made for all the relevant stakeholders," he said.

The past year also saw successes for Lohmann on the transactional front.

In what Lohmann called the "bread and butter" of his practice, he handled the environmental due diligence and other environmental matters in chemical maker Solutia Inc.'s $113 million acquisition of Southwall Technologies Inc., a plastic film and glass products manufacturer.

In another important representation for Solutia, Lohmann was lead environmental lawyer on a Kirkland team that negotiated a settlement with Lyondell Chemical Co. under which the company agreed to properly close a petrochemical facility Solutia had sold in Chocolate Bayou, Texas. Lyondell had sought to use bankruptcy remedies to avoid environmental cleanup of the facility. The settlement required that the company decontaminate equipment before departing.

Lohmann also represented longtime client Berry Plastics Corp. in its acquisition of consumer packaging powerhouse Rexam SBC for $360 million, in a deal that closed in September. Lohmann, along with partner Toby Chun, coordinated the environmental assessment of numerous Rexam facilities and negotiated the environmental risk allocation in the deal.

Lohmann said that establishing personal and professional relationships with clients early on and tapping into Kirkland's different practices has allowed his group to develop, even as the economy has struggled. Transactional work is balanced by back-end work on the restructuring side, he said.

"What we've sought to do is connect with those practices and clients and provide support across the full range of what the firm does," he said. "It's kept us busy in boom times, but also in recessionary times. We've managed to survive and prosper through the recession as a result of having kept our skill set broad and well-hedged."