By Dow Jones Business News,
January 14, 2014, 02:25:00 PM EDT
Anadarko Petroleum Corp. ( APC ) says it should have to pay no more than $1.76 billion in damages to Tronox Inc.
creditors for an improper spinoff, not up to $14.5 billion as a judge ruled last month.
In a Monday filing with U.S. Bankruptcy Court in Manhattan, Anadarko challenged parts of a decision made last month by
Judge Allan L. Gropper, who found Anadarko liable for between $5 billion and $14.5 billion, subject to the calculation
of how much Anadarko is owed as a creditor in Tronox's bankruptcy.
Judge Gropper's decision last month, after a lengthy trial, called for the money to go into a trust created to pursue
Tronox's lawsuit seeking to assign blame for the company's toxic past.
Anadarko says the amount that should be offset is either $13.6 billion or $12.7 billion, which would mean it owes
between $850 million and $1.76 billion, but no more.
The company made a third calculation that would call for it to pay a $4 billion judgment but says that number "
contradicts both the opinion's legal rationale and the court's finding of fact." Only the $850 million amount would
support the court's opinion properly, Anadarko said.
"We believe the Court's approach in its provisional findings, as applied, leads to incorrect conclusions for the
calculation of damages and is contrary to the Court's stated view that the purpose of the applicable law is "remedial
rather than punitive'," Anadarko Chairman, President and Chief Executive Al Walker said in a statement.
A Tronox spokesman declined to comment. The company has 30 days to respond to Anadarko's claim in court.
Tronox's creditors, joined by the U.S. government, in 2009 sued former parent company Kerr-McGee Corp. and Anadarko,
claiming that Tronox's former parent saddled it with massive environmental liabilities as part of a 2006 spinoff,
setting the chemical company on a path to bankruptcy.
Tronox's creditors argued the spinoff was a so-called fraudulent transfer, which can be challenged under bankruptcy
law. In bankruptcy proceedings, a judge can find certain loans to be fraudulent transfers if a company was insolvent
when taking on new liabilities.
Tronox, which makes titanium dioxide, a whitening pigment used in everything from paper to toothpaste, filed for
Chapter 11 in early 2009. Anadarko purchased Kerr-McGee for $19 billion after it spun off Tronox.
In August 2009, the U.S. filed claims against Tronox seeking to recoup environmental-cleanup costs and other damages.
The following year, the U.S. and Tronox settled.
As part of the chemical company's plan to exit Chapter 11, Tronox created five environmental-response trusts to handle
the cleanup of more than 1,000 potentially contaminated sites.
The new company, Tronox Ltd., emerged from Chapter 11 bankruptcy protection in February 2011. As part of its exit, the
Oklahoma City company's Chapter 11 plan created the Anadarko litigation trust to pursue Tronox's lawsuit against
Anadarko and Kerr-McGee. Tronox has transferred 88% of its interest in the lawsuit to the federal government.
-Patrick Fitzgerald contributed to this article.
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