Innovest Strategic Value Advisors

Site Hazard, Settlement Activity and Superfund Liability Valuation

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Courtesy of Innovest Strategic Value Advisors

HYPOTHESIS:

Site (extent and cost of clean-up) and allocation uncertainty (number of parties associated with the site) surrounding contingent Superfund liabilities affect their market valuation. EPA data providing information on the extent of uncertainty surrounding contingent Superfund liabilities will be relevant to valuation.

H-1: The number of Superfund sites with which a firm is identified is negatively associated with market value of PRPs.  H-2a: Sites with higher levels of hazard are more negatively associated with market values of PRPs.
H-2b: Sites with higher levels of settlement activity are less negatively associated with market values of PRPs.
H-3: Superfund sites are more negatively associated with market value of PRPs in post-SARA years than in the period preceding its effective date (1986).

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