WM (formerly Waste Management Inc.), Houston, faces a potential class-action lawsuit filed by Robbins Geller Rudman & Dowd LLP on behalf of investors who purchased redeemable senior notes between Feb. 13, 2020. and June 23, 2020, in the lead-up to WM’s acquisition of Advanced Disposal Services (ADS).

Filed June 9 in the U.S. District Court for the Southern District of New York, the case pits plaintiff United Industrial Workers Pension Plan against WM and several senior officers within the company, who, the suit alleges, violated portions of the Securities and Exchange Act of 1934.

A representative of WM’s media team says in an email the company cannot comment on the lawsuit at this time.

The affected investments include the following senior redeemable notes issued by WM in May 2019: 2.95 percent senior notes due in 2024, 3.20 percent senior notes due in 2026, 3.45 percent senior notes due in 2029 and 4 percent senior notes due in 2039.

On April 14, 2019, WM entered into an agreement and merger plan to acquire ADS for $4.9 billion, or $33.15 per share. Among other things, the merger required antitrust clearance from regulators, including the U.S. Department of Justice (DOJ).

Knowing that the transaction posed antitrust concerns, WM agreed in the merger deal to divest up to $200 million in revenue-producing assets of the combined companies over a prior 12-month period, according to the legal complaint.

On May 14, 2019, WM issued $4 billion worth of senior notes in a public offering to finance the company’s acquisition of ADS. As described in the final prospectus for the notes, four of the five series, totaling $3 billion in principal, were subject to a special mandatory redemption (SMR) clause in the merger agreement. The SMR clause required WM to repurchase the notes for 101 percent of par if the merger was not completed by July 14, 2020, the end date under the merger agreement.

In the notes’ prospectus, WM initially represented that the “merger will close by the first quarter of 2020,” according to the lawsuit. To address concerns raised by the DOJ, WM and ADS engaged in negotiations with several potential divestiture buyers, including GFL Environmental Inc., for the divestiture of assets in excess of the $200 million antitrust revenue threshold.

The lawsuit alleges that, throughout the class period from Feb. 13 and June 23, 2020, the defendants made false or misleading public statements and failed to disclose that the DOJ would require the company to divest itself of assets in excess of the $200 million antitrust revenue threshold; that, as a result, the merger would not be completed by the end date of July 14, 2020; and that the notes would be subject to mandatory redemption at 101 percent of par.

On June 24, 2020, WM announced that it and ADS had revised the terms of the merger and that WM needed to divest more assets than previously disclosed to receive DOJ approval of the deal. The companies also agreed to sell $835 million worth of assets to try to satisfy antitrust regulators, including approximately $300 million to GFL. Those assets had generated approximately $345 million in revenue in 2019.

Under the revised merger terms, WM agreed to purchase ADS for $4.6 billion, or $30.30 per share, $300 million less than the original price.

WM also revealed in June 2020 that the deal was now not expected to close until “the end of the third quarter of 2020”—six months later than had been represented by defendants at the start of the class period and after the July 14, 2020 end date which triggered the SMR redemption feature of the notes.

As a result of this disclosure, the prices of the notes fell. The amount of the loss will likely be determined through jury trial, which the United Industrial Workers Pension Plan has requested, according to the legal action.

The acquisition of ADS was finalized Oct. 30, 2020. Shortly prior to the closing, the DOJ announced WM would have to divest itself of 15 landfills, 37 transfer stations, 29 hauling locations, more than 200 waste collection routes and other assets to proceed with the ADS acquisition. At that time, the DOJ said that without the divestiture, the acquisition would substantially lessen competition for small container commercial waste collection or municipal solid waste disposal services in more than 50 local markets.

SCS Engineers, a Long Beach, California-based environmental engineering firm, has announced it will construct the first gas collection and control system (GCCS) and flare station at the WM Gray Wolf Regional Landfill. The facility is located in Dewey, Arizona, and provides disposal services for Yavapai County and northern Arizona.

According to SCS, the GCCS serves as a critical component to keep Gray Wolf compliant with federal emissions standards. The system collects gases that are a natural byproduct of the decomposition of organic material in landfills and directs them to a central point where they are processed and treated via flare.

Methane—one of the gases a landfill produces—is 25 times more powerful than carbon dioxide in terms of its greenhouse effect. By destroying methane using combustion, such as flaring, SCS says it can diminish its greenhouse gas potential by 95 percent.

Since their introduction in the early 1990s, U.S. Environmental Protection Agency National Source Performance Standards emission guidelines require landfill owners and operators to evaluate and mitigate landfill air emissions.

“We’re proud to back WM in their support of community programs and essential services that make Yavapai County and its surrounding region a healthy place to live, work and play,” says Arthur Jones, SCS desert southwest region manager. Jones, along with SCS Project Manager Chris Romo, lead the Gray Wolf GCCS construction project.

Vermont Gov. Phil Scot has signed the state’s first environmental justice policy into law—joining several other New England states with similar legislation.

The new policy is designed to ease the burden on communities that face disproportionate impacts from environmental stressors such as pollution, natural disasters and the downsides of energy infrastructure or waste facilities.

“It is the policy of the state of Vermont that no segment of the population of the state should, because of its racial, cultural or economic makeup, bear a disproportionate share of environmental burdens or be denied an equitable share of environmental benefits,” the new law states.

The law will create two new advisory groups—an Advisory Council on Environmental Justice and an Interagency Environmental Justice Committee—which will be charged with guiding state agencies toward investing more in impacted communities, VTDigger.com reports.

It will also establish a new mapping tool overseen by the state’s Agency of Natural Resources that would identify communities where environmental burdens “have disproportionate impacts on Vermonters.” Similar methods have been deployed in 17 other states.

More than nine environmental groups across the state have voiced their support for the legislation since it was signed into law, with many providing input during the bill’s drafting process.

Mia Schultz, president of the Rutland Area NAACP, told Vermont Public Radio that the policy marks an important step forward for Vermont.

“It is indisputable that the harmful effects of climate change disproportionately affect marginalized communities, including BIPOC people,” Schultz says. “The principles of an environmental justice law acknowledge and address the injustices of civil rights and seek to rectify the exclusion of the most vulnerable and affected members of society.”