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What You Need to Know About Selling Your Waste Hauling Company

truck-3503831__340-300x200Selling a business can be an involved process.  However, selling an A901 licensed waste transportation business in New Jersey can be even more complex.

Waste hauling is a strictly monitored and regulated industry in New Jersey under the umbrella of the New Jersey Department of Environmental Protection (“DEP”).  In fact, while the waste transportation company may be owned by limited liability members or corporate shareholders, no owner may sell an A-901 licensed business without DEP approval and oversight.

Indeed New Jersey’s Administrative Code (“NJAC”)  contains the DEP’s regulations which provide that no solid waste transporter can sell, lease, or otherwise dispose of its property (including customer lists) without obtaining prior authorization from the DEP.   Therefore, anyone seeking to sell their waste collection business or the assets thereof, must file the appropriate notices with the DEP and obtain approval from the DEP before any closing or consummation of the sale or transfer may take place.

Likewise, any consolidations, mergers, and even dissolutions (closings) of the A-901 licensed business must be approved by the DEP prior to the change in the business taking effect.  Similarly, an agreement to transfer shares of capital stock in some situations would also required to have DEP approval.

In order for approvals to be obtained, the company must first file a petition with the DEP seeking authorization to proceed with the proposed transaction.  Depending on the type of transaction, a significant amount of information may be required to be included in such a petition to allow the DEP to ensure that there are no concerns regarding the change in operations or ownership.

While the DEP requires that a petition be filed at least 30 days prior to the proposed closing date of the transaction, it is advisable that the petition be done as soon as possible since it can take more than 30 days for the DEP to issue an authorization for the transaction – sometimes considerably more than 30 days. The DEP is only required to advise the business within 30 days of receipt whether their petition is complete or incomplete. Oftentimes the DEP will require additional information regarding the A-901 licensed business and/or the other party or parties involved.  Where the DEP requires additional information, the DEP has 60 days following receipt of all the requested information to provide a decision on the request for approval.  The DEP is permitted in some instanced to conduct a more thorough investigation of the parties in question and the rates to be charged by the A-901 licensed company. In odd cases, live testimony may even be required to be heard before the DEP.

Further, waste collectors are even required to obtain authorization from the DEP before executing a mortgage.  As with petitions for the sale of a solid waste hauling business or its assets, a petition for approval to execute a mortgage requires a significant amount of information and documentation, depending on the reasons for the mortgage or other indebtedness.

In addition to these issues specific to the solid waste industry, business sales and asset sales require detailed agreements to ensure legal compliance as well as to safeguard your rights as either a buyer or a seller.

McLaughlin & Nardi, LLC’s attorneys are experienced with both commercial sales and DEP regulations governing the solid waste industry and can assist companies and individuals throughout the entire process of purchasing or selling an A-901 licensed waste transportation company.  To learn more about what we may be able to do to help, please visit our website,  or contact one of our New Jersey lawyers by e-mail or telephone at (973) 890-0004.

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