Anadarko Petroleum Corp., its Kerr-McGee Corp. unit and former officers of the company have settled some fraud claims brought by Tronox Inc. shareholders for $35 million in cash.
Plaintiffs agreed to settle their suit for a total of $37 million, including $2 million for their claims against Ernst & Young LLP, lawyers for lead plaintiff LaGrange Capital Partners LP said in court papers filed in Manhattan district court Friday. Settled claims include those against officers Luke Corbett, Robert Wohleber and Gregory Pilcher.
“The substantial payment of $37 million makes the settlement an excellent result for the Class,” lawyers for LaGrange wrote in a motion seeking court approval of the agreement.
Tronox shareholders sued Anadarko in July 2009, seeking unspecified damages over two transactions. The first split off Kerr-McGee’s liabilities and chemicals business to create the company that went public in 2006 as Tronox. Anadarko then bought Kerr-McGee’s profitable oil and natural-gas business. They had also claimed that Ernst & Young’s audit reports about the company were misleading, and that the company’s former executives and officers had been involved.
U.S. District Judge Shira Scheindlin in Manhattan, overseeing the case, had previously denied Anadarko’s motion to throw out allegations that it was responsible for the actions of Kerr-McGee, which served as its agent to control how Tronox reported reserves for environmental cleanup costs. She had also denied requests by the company’s former officers to dismiss allegations of fraud.
She had also dismissed claims that Anadarko’s purchase of Kerr-McGee was a fraudulent act.
Tronox, based in Oklahoma City, filed for bankruptcy in 2009, facing claims of as much as $10.5 billion from the U.S. for environmental cleanup costs. The company’s creditors and the U.S. government also sued Anadarko and Kerr-McGee, seeking $25 billion in a trial that is ongoing in Manhattan bankruptcy court.
The case is In re Tronox Inc. Securities Litigation, 09-cv-6220, U.S. District Court, Southern District of New York (Manhattan).