Chemical Company Compensates EPA $270 Million in Bankruptcy Settlement
WASHINGTON, DC, November 29, 2010 (ENS) – The multi-national chemical company Tronox Incorporated has agreed to resolve its environmental liabilities for $270 million and 88 percent of Tronox’s interest in a pending litigation, according to the U.S. Environmental Protection Agency, the U.S. Justice Department and the United States Attorney for the Southern District of New York.
Tronox and 14 of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on January 12, 2009 in the U.S. Bankruptcy Court for the Southern District of New York.
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Tronox’s titanium dioxide pigment is used in numerous everyday products including paint, coatings and plastics. (Photo courtesy Tronox) |
At the time of the bankruptcy filing, the company was potentially responsible for past costs incurred and future response costs under the Comprehensive Environmental Response, Compensation and Liability Act, CERCLA, commonly known as the Superfund Law, and the Resource Conservation and Recovery Act relating to sites throughout the country, as well as for penalties under CERCLA, RCRA, the Clean Air Act, and the Clean Water Act.
Under the terms of the settlement, Tronox will pay $270 million in cash. The bankruptcy settlement will reimburse the EPA for past cleanup costs and fund future cleanups at contaminated sites across the country.
The majority of the funding will be placed in five environmental response trusts for the cleanup of numerous sites, most of which have been contaminated with hazardous substances or waste.
Non-cash assets, such as insurance and financial assurance assets worth at least $50 million, including property located in Henderson, Nevada, will also be provided by Tronox to the environmental response trusts.
Tronox, a Delaware corporation based in Oklahoma City, is a multi-national chemical company that makes and sells titanium dioxide and other specialty chemicals used in plastics, paper and inks.
The company has customers located in more than 90 countries and operates in North America, Europe, and Australia.
Tronox was created through a spin-off from the Kerr-McGee Corporation. Several months after the spin-off was completed, Anardarko Petroleum Corporation purchased Kerr-McGee for $18 billion.
Tronox is currently involved in litigation against Anadarko and Kerr-McGee over allegations that those companies imposed years worth of legacy liabilities, including environmental obligations on Tronox, leaving Tronox insolvent and undercapitalized. The trial is expected to begin in late 2011 or early 2012.
Eighty eight percent of any settlement awarded to Tronox, as a result of that litigation, will be used to fund additional cleanup efforts.
Before being considered by the bankruptcy court for approval, the settlement will be lodged with the bankruptcy court for a period of 30 days to provide public notice and to afford members of the public the opportunity to comment on the settlement.
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