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Lisa Brown, Esq. • • December 8 , 1988 Page 2 individual corporate shareholders, officers and employees for purposes of determining liability. See Health and Safety Code § 25323 .5 (defining liability with reference to CERCLA) ; e.g. , State of New York v. Shore Realty, 759 F. 2d 1032 , 1052 (2d Cir. 1985) (interpreting CERCLA) . In this case, Pete Smith is a 50% shareholder of EP (with his wife owning the other 50%) and is the main, if not the only, proprietor of the business. Mr. Smith then may properly be subject to an order to close the tanks as their owner and operator. While Mr. Henderson correctly analyzed the Port and EP's liability, he wrongly found the Bank of Stockton (the "Bank") had not become an owner of the tanks. First, he grossly mischaracterized the Port's position by saying the Port did not claim the Bank owned the tanks. Whether or not the Port used the word "owner" in its July 29, 1988 letter is irrelevant. The Port's analysis clearly focused on the Bank's ownership of the tanks, and the Port unqualifiedly takes the position the Bank is an owner of the tanks. Mr. Henderson states in a conclusory manner that the order from the Bankruptcy Court only authorized the Bank to perfect its security interest and not to foreclose on its personal property collateral, including the tanks. However, this analysis misses the point. The Bank stepped across the boundary between perfecting its security interest and foreclosing when it took possession of the property, paid rent and otherwise exercised dominion over or ownership of the tanks. Surely, if the Bank had completed the sale, its actions would have constituted a foreclosure on the collateral and not merely an act, in Mr. Henderson's words, "to liquidate assets of the bankruptcy estate and to distribute proceeds to a priority creditor. " Here, the beneficiary of the sale was the Bank, not simply another third- party creditor. The Bank's acts of taking possession of the collateral and selling it for its own account meet any definition of a foreclosure, regardless of whether the case is in bankruptcy. Although there is a continuum of actions between perfecting a security interest (not assuming ownership) and full foreclosure (unambiguously assuming ownership) , the Bank's actions fall on the ownership side of that scale. As discussed in our prior correspondence, the Bank's seizure of possession, rental payments and other actions with regard to the property had no relation to perfecting the Bank's security interest. On the contrary, these actions reveal that the Bank did everything it could to foreclose on the property short of actually selling it. The Bank failed to sell the property only because it realized liability might attach to the tanks. But by that time, the Bank had "caught its foot" in the trap of ownership and could not escape.