NEW YORK, (Reuters) – Anadarko Petroleum Corp and its Kerr-McGee unit acted with “intent to hinder” when they spun off Tronox, the paint materials company that later went bankrupt, and should pay billions of dollars in environmental cleanup costs, a judge ruled yesterday.
The decision, which parties had been awaiting for about a year since a trial wrapped up in late 2012, drove Anadarko’s shares down 9.8 percent to $75.50 in after-hours trading.
Judge Allan Gropper said damages could range between about $5 billion and more than $14 billion, in the decision handed down late Thursday afternoon in U.S. Bankruptcy Court in Manhattan.
Anadarko and Kerr-McGee are expected to appeal the ruling.
Tronox sued Anadarko and Kerr-McGee in 2009, arguing that the 2005 spinoff that created Tronox was fraudulent because it loaded Tronox up with environmental liabilities that made it insolvent.
Tronox, which makes titanium dioxide used in paints, filed for Chapter 11 bankruptcy in 2009.
When Tronox emerged from bankruptcy in 2011, a litigation trust for certain Tronox creditors took its place as the plaintiff in this case. The trust claimed that Kerr-McGee’s spinoff of Tronox allowed Kerr-McGee to become more valuable to Anadarko, which acquired it in 2006.
