Anadarko Pollution Cleanup Sites May Reach 2,800, Court Told by Attorney
Anadarko Petroleum Corp., along with its Kerr-McGee Corp. unit, may face liability for cleaning up 2,800 contaminated sites as part of a lawsuit brought by its spinoff Tronox Inc. and the government, a lawyer said.
Anadarko, one of the world’s largest independent oil and natural-gas producers, was sued by its former subsidiary, Tronox, which is now in bankruptcy, and by the U.S. Environmental Protection Agency for cleanup costs at 70 sites included in Tronox’s spinoff in 2006.
Dennis Wanlass, Tronox’s chief executive officer, couldn’t get answers to what the “environmental footprint” of the company was when he joined in 2008, according to Jeffrey Zeiger, an attorney for the Oklahoma City-based company.
“Our experts have been working very, very hard to answer that question,” Zeiger told U.S. Bankruptcy Judge Allan Gropper yesterday. “Now we’ve settled that there are around 2,800 sites that Tronox became exclusively liable for through the IPO.”
Duke McCall, a lawyer for Anadarko, said the government hasn’t produced documents to prove its case.
“We’re missing docs from 1,900 sites at which they allege there are liabilities,” McCall told the judge. “We’re being asked to defend against a claim for which we do not have the underlying factual information,” including the sites’ locations, potential cleanup costs, alleged contamination and Anadarko’s claimed connection to the sites, McCall said.
Tronox has won court confirmation of a plan to reorganize and is waiting for public comments on an environmental settlement before it exits bankruptcy protection. Under the settlement, Tronox set aside $320 million to cover what it estimated were government environmental claims of $1.4 billion to $5 billion.
The government, including the EPA, asserted claims of as much as $10.5 billion, according to court papers filed as part of Tronox’s Chapter 11.
Tronox sued Woodlands, Texas-based Anadarko and Kerr-McGee as part of its bankruptcy, alleging the liabilities fell to Kerr -McGee because the company transferred environmental liabilities to Tronox after moving its most valuable assets to a new company that Anadarko acquired in 2006 for $18 billion.
The U.S. and Tronox agreed to coordinate litigation, and part of Tronox’s settlement calls for the U.S. to get 88 percent of anything it wins in its lawsuit against Anadarko and Kerr- McGee. Tort claimants would get the remaining 12 percent.
Zeiger also told Gropper yesterday that expert witnesses may focus on estimating clean-up costs at 25 percent of the sites.
Anadarko asked Gropper to force the U.S. to produce documents, or impose sanctions on the government and Tronox by blocking them from alleging liabilities at sites which they hadn’t yet documented.
Gropper declined to rule and told the parties to resolve their disputes.
“It would seem to me at some point that the proponent of the lawsuit has to produce something with respect to the proposed sites,” Gropper said.
The bankruptcy case is Tronox Inc., 09-10156, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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