19 July 2012 19:31 [Source: ICIS news]
HOUSTON (ICIS)--The trial for the lawsuit between the US government and energy producer Anadarko will resume next week, as the two sides dispute environmental liabilities connected to the spin-off of pigment producer Tronox, the US Attorney's Office said on Thursday.
Earlier, the trial had been adjourned so the US and Anadarko could participate in settlement discussions, according to a docket entry in the case. The settlement discussions were confidential.
Bloomberg reported that the two sides failed to reach a settlement.
The US would not comment about any settlement discussions. Anadarko did not immediately respond to a request for comment.
The litigation had initially started with Tronox, which sued Kerr-McGee, its former corporate parent, and Anadarko, which acquired Kerr-McGee.
Tronox alleged that Kerr-McGee saddled it with massive environmental liabilities during its spin off on 31 March, 2006.
Tronox alleged that the spin-off was part of a strategy, in which Kerr-McGee used Tronox as a way to get rid of decades worth of environmental liabilities.
By shedding the liabilities, Kerr-McGee would make itself an attractive target for an acquisition, Tronox alleged.
Within three months of the spin off, Anadarko offered to acquire Kerr-McGee for $18bn (€15bn), Tronox said. The deal closed on 10 August 2006.
Tronox alleged that the liabilities overwhelmed the company, dooming it to fail.
The company filed for bankruptcy protection under Chapter 11 in January 2009.
Tronox sued Kerr-McGee and Anadarko while it was still operating under bankruptcy protection.
The US has since taken over the lawsuit as part of a deal it struck with Tronox.
Under the deal, Tronox paid environmental regulators $270m in cash to help pay for the clean-up for about 2,800 polluted sites, according to the agreement.
In return, the regulators would receive 88% of any reward it would win against Kerr-McGee. The remaining 12% would compensate others who filed claims alleging damage from the sites.
Tronox would receive nothing if the judge rules in favour of the plaintiffs. Likewise, it would owe no additional clean-up costs if the judge rules in favour of the defendants.
Tronox has since emerged from bankruptcy protection, and its stock is now listed on the New York Stock Exchange (NYSE).
The company makes titanium dioxide (TiO2).
($1 = €0.82)
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