MANHATTAN (CN) – Federal prosecutors say Kerr-McGee tried to duck hundreds of millions of dollars in liabilities in environmental cases by forming a chemical business subsidiary, Tronox, and spinning it off before Anadarko Petroleum bought Kerr-McGee for $18 billion in 2006.
Tronox, which was forced into bankruptcy, sued Kerr-McGee and Anadarko this month, claiming they had stripped it of assets while shedding themselves of liability. In the case filed Thursday, the United States moved to intervene against Anadarko and Kerr-McGee. The government claims they tried to duck their responsibility for environmental debts to the government, and stripped assets that could have been used to pay those debts. The government seeks judgment for those debts.
Prosecutors say the EPA notified Kerr-McGee in 1999 that it held the company responsible for the $280 million clean-up of its Manville, N.J., site. Kerr-McGee, concerned about that, and about other similar sites across the country, created “Project Focus,” to shed itself of responsibility, dump the liabilities onto Tronox and emerge as a presumably “clean” company, prosecutors say.