(c) Participation in management. The term "participating in the management of an underground storage tank or underground storage tank system" means that the holder is engaging in acts of petroleum underground storage tank or underground storage tank system management, as defined herein.
(1) Actions that are participation in management pre-foreclosure. Participation in the management of an underground storage tank or underground storage tank system means, for purposes of this Section, actual participation in the management or control of decision making related to the underground storage tank or underground storage tank system by the holder and does not include the mere capacity or ability to influence or the unexercised right to control underground storage tank or underground storage tank system operations. A holder is participating in management, while the borrower is still in possession of the underground storage tank or underground storage tank system encumbered by the security interest, only if the holder either:
(A) exercises decision making control over the borrower's environmental compliance, such that the holder has undertaken responsibility for the borrower's underground storage tank or underground storage tank system management; or(B) exercises control at a level comparable to that of a manager of the borrower's enterprise, such that the holder has assumed or manifested responsibility for the overall management of the enterprise encompassing the day-to-day decision making of the enterprise with respect to (i) environmental compliance, or (ii) all, or substantially all, of the operational (as opposed to financial or administrative) aspects of the enterprise other than environmental compliance.(2) Actions that are not participation in management pre-foreclosure.(A) Actions at the inception of the loan or other transaction. No act or omission prior to the time that indicia of ownership are held primarily to protect a security interest constitutes evidence of participation in management within the meaning of this Section. A prospective holder who undertakes or requires an environmental investigation of the underground storage tank or underground storage tank system in which indicia of ownership are to be held or requires a prospective borrower to clean up contamination from the underground storage tank or underground storage tank system or to comply or come into compliance with any applicable law or regulation is not by that action considered to be participating in the management of the underground storage tank or underground storage tank system.(B) Loan policing and workout. Actions that are consistent with holding ownership indicia primarily to protect a security interest do not constitute participation in management for purposes of this Section. The authority for the holder to take such actions may, but need not, be contained in contractual or other documents specifying requirements for financial, environmental, and other warranties, covenants, conditions, representations, or promises from the borrower. Loan policing and workout activities cover and include all such activities up to foreclosure or its equivalents, exclusive of any activities that constitute participation in management. (i) Policing the security interest or loan. A holder who engages in policing activities prior to foreclosure shall remain within the exemption provided that the holder does not by such actions participate in the management of the underground storage tank or underground storage tank system as provided in item (1) of subsection (c). Such actions include, but are not limited to, requiring the borrower to clean up contamination from the underground storage tank or underground storage tank system during the term of the security interest; requiring the borrower to comply or come into compliance with applicable federal, State, and local environmental and other laws, rules, and regulations during the term of the security interest; securing or exercising authority to monitor or inspect the underground storage tank or underground storage tank system in which indicia of ownership are maintained or the borrower's business or financial condition during the term of the security interest; or taking other actions to adequately police the loan or security interest (such as requiring a borrower to comply with any warranties, covenants, conditions, representation, or promises from the borrower).(ii) Loan workout. A holder who engages in workout activities prior to foreclosure or its equivalents will remain within the exemption of this Section provided that the holder does not by such action participate in the management of the underground storage tank or underground storage tank system as provided in item (1) of subsection (c). For purposes of this Section, "workout" refers to those actions by which a holder, at any time prior to foreclosure or its equivalents, seeks to prevent, cure, or mitigate a default by the borrower or obligor; or to preserve, or prevent the diminution of, the value of the security. Workout activities include, but are not limited to, restructuring or renegotiating the terms of the security interest; requiring payment of additional rent or interest; exercising forbearance; requiring or exercising rights under an assignment of accounts or other amounts owing to an obligor; requiring or exercising rights under an escrow agreement pertaining to amounts owing to an obligor; providing specific or general financial or other advice, suggestions, counseling, or guidance; and exercising any right or remedy the holder is entitled to by law or under any warranties, covenants, conditions, representations, or promises from the borrower.(3) Foreclosure on an underground storage tank or underground storage tank system and participation in management activities; post-foreclosure.(A) Foreclosure. Indicia of ownership that are held primarily to protect a security interest include legal or equitable title acquired through or incident to foreclosure or its equivalents. For purposes of this Section, the term foreclosure or its equivalents includes purchase at foreclosure sale; acquisition or assignment of title in lieu of foreclosure; termination of a lease or other repossession; acquisition of a right to title or possession; an agreement in satisfaction of the obligation; or any other formal or informal manner by which the holder acquires title to or possession of the secured underground storage tank or underground storage tank system. The indicia of ownership held after foreclosure continues to be maintained primarily as protection for a security interest provided that the holder undertakes to sell, re-lease an underground storage tank or underground storage tank system held pursuant to a lease financing transaction, or otherwise divest itself or the underground storage tank or underground storage tank system in a reasonably expeditious manner, using whatever commercially reasonable means are relevant or appropriate with respect to the underground storage tank or underground storage tank system, taking all facts and circumstances into consideration, and provided that the holder did not participate in management, as defined in item (1) of subsection (c), prior to foreclosure or its equivalents. For purposes of establishing that a holder is seeking to sell, re-lease an underground storage tank or underground storage tank system held pursuant to a lease financing transaction, or divest an underground storage tank or underground storage tank system in a reasonably expeditious manner, the holder may use whatever commercially reasonable means as are relevant or appropriate with respect to the underground storage tank or underground storage tank system, or may employ the means specified in item (3)(B) of subsection (c). A holder that outbids, rejects, or fails to act upon a written bona fide, firm offer of fair consideration for the underground storage tank or underground storage tank system, as provided in item (3)(B) of subsection (b), is not considered to hold indicia of ownership primarily to protect a security interest.(B) Holding foreclosed property for disposition and liquidation. A holder who did not participate in management prior to foreclosure or its equivalents may sell, re-lease an underground storage tank or underground storage tank system held pursuant to a lease financing transaction, liquidate, wind up operations, and take measures to preserve, protect, or prepare the secured underground storage tank or underground storage tank system prior to sale or other disposition. The holder may conduct these activities without voiding the exemption, subject to the requirements of this Section. (i) A holder establishes that the ownership indicia maintained following foreclosure or its equivalents continue to be held primarily to protect a security interest by listing, within 12 months from the time that the holder acquires marketable title, the underground storage tank or underground storage tank system or the facility or property on which the underground storage tank or underground storage tank system is located, with a broker, dealer, or agent who deals with the type of property in question or by advertising the underground storage tank or underground storage tank system as being for sale or disposition on at least a monthly basis in either a real estate publication or a trade or other publication suitable for the underground storage tank or underground storage tank system in question, or a newspaper of general circulation (defined as one with a circulation over 10,000, or one suitable under any applicable federal, State, or local rules of court for publication required by court order or rules of civil procedure) covering the area in which the underground storage tank or underground storage tank system is located. If the holder fails to act diligently to acquire marketable title, the 12 month period begins to run on the date of the judgment of foreclosure or its equivalents.(ii) A holder that outbids, rejects, or fails to act upon an offer of fair consideration for the underground storage tank or underground storage tank system or the facility or property on which the underground storage tank or underground storage tank system is located establishes by such outbidding, rejection, or failure to act, that the ownership indicia in the secured underground storage tank or underground storage tank system are not held primarily to protect the security interest, unless the holder is required, in order to avoid liability under federal or State law, to make a higher bid, to obtain a higher offer, or to seek or obtain an offer in a different manner.(A) "Fair consideration", in the case of a holder maintaining indicia of ownership primarily to protect a senior security interest in the underground storage tank or underground storage tank system, is the value of the security interest as defined in this item (3)(B)(iii)(A) of subsection (c). The value of the security interest is calculated as an amount equal to or in excess of the sum of the outstanding principal, or comparable amount in the case of a lease that constitutes a security interest, owed to the holder immediately preceding the acquisition of full title (or possession in the case of an underground storage tank or underground storage tank system subject to a lease financing transaction) pursuant to foreclosure or its equivalents, plus any unpaid interest, rent, or penalties (whether arising before or after foreclosure or its equivalents), plus all reasonable and necessary costs, fees, or other charges incurred by the holder incident to workout, foreclosure or its equivalent, retention, preserving, protecting, and preparing the underground storage tank or underground storage tank system prior to sale, re-lease of an underground storage tank or underground storage tank system held pursuant to a lease financing transaction or other disposition plus environmental investigation and corrective action costs incurred under any federal, State or local rule or regulation less any amounts received by the holder in connection with any partial disposition of the property and any amounts paid by the borrower subsequent to the acquisition of full title (or possession in the case of an underground storage tank or underground storage tank system subject to a lease financing transaction) pursuant to foreclosure or its equivalents. In the case of a holder maintaining indicia of ownership primarily to protect a junior security interest, fair consideration is the value of all outstanding higher priority security interests plus the value of the security interest held by the junior holder, each calculated as set forth in the preceding sentence.(B) "Outbids, rejects, or fails to act upon an offer of fair consideration" means that the holder outbids, rejects, or fails to act upon within 90 days of receipt of a written, bona fide, firm offer of fair consideration for the underground storage tank or underground storage tank system received at any time after 6 months following foreclosure or its equivalents. A "written, bona fide, firm offer" means a legally enforceable, commercially reasonable, cash offer solely for foreclosed underground storage tank or underground storage tank system, including all material terms of the transaction, from a ready, willing, and able purchaser who demonstrates to the holder's satisfaction the ability to perform. For purposes of this provision, the 6 month period begins to run from the time that the holder acquires marketable title; otherwise, provided that the holder, after the expiration of any redemption or other waiting period provided by law, acted diligently to acquire marketable title; otherwise, the 6 month period begins to run on the date of foreclosure or its equivalents.