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Tronox, Inc. v. Anadarko Petroleum Corp.

ELR Citation: 46 ELR 20027
Nos. 14-cv-5495, (S.D.N.Y., 02/01/2016) (Forrest, J.)

A district court held that a 2014 settlement agreement between a spinoff company, the U.S. government, an energy company, and its parent bars over 4,300 individuals from bringing Pennsylvania tort claims arising from the operation of a wood treatment plant formerly owned and operated by the spinoff's predecessor. In 2006, the energy company created the spin-off company, burdening it with massive environmental and tort liabilities the energy company had accumulated over the course of decades of operating in the chemical, mining, and oil and gas industries throughout the nation, but without sufficient assets with which to address these liabilities. The spinoff company then filed for bankruptcy, adding to the complicated corporate history of the parties involved. The $5.15 billion settlement agreement that was approved in 2014 resolved two lawsuits in which the spinoff company and the U.S. government asserted fraudulent transfer and other claims against the energy company and its parent. The case at bar concerns a number of actions against the energy company that were first filed in 2005 but then stayed pending the resolution of the spin-off's bankruptcy proceedings. As part of its approval of the 2014 settlement agreement, however, the court issued a permanent injunction that prohibited creditors in the spin-off's bankruptcy action and others from pursuing legal claims against the spinoff. The claims, therefore, were dismissed.