Anadarko Said to Settle Kerr
Bloomberg News
said it agreed to pay $5.15 billion to settle U.S. environmental claims left behind when it took over energy giant Kerr-McGee, freeing money to clean up decades of pollution across the U.S.
Founded in 1929 near Oklahoma City, Kerr-McGee left a toxic legacy that includes uranium mines in Navajo territories in the West and wood-treatment plants that used creosote in Mississippi and Pennsylvania, the U.S. Environmental Protection Agency has said.
The U.S. initially sought $25 billion to clean up 2,772 sites and compensate about 8,100 claimants. Anadarko, based in the Woodlands, Texas, had said in January it should pay $850 million to $4 billion. Anadarko shares surged as much as 14 percent on news of the accord.
Kerr-McGee spun off its chemicals business and old environmental liabilities as Tronox Inc. beginning in 2005. About three months after the transaction was completed, Anadarko offered to buy Kerr-McGee's oil and natural gas assets for $18 billion. Tronox filed for bankruptcy in 2009 and sued Kerr-McGee over the environmental debt. The U.S., as Tronox's largest creditor, intervened on behalf of the EPA.
Anadarko will pay $5.15 billion in exchange for a complete release of all claims asserted against Kerr-McGee, the company said today in a statement. The settlement is subject to bankruptcy court approval.
U.S. Bankruptcy Judge Allan Gropper in New York ruled in December that Kerr-McGee improperly unloaded its environmental liabilities into Tronox before the Anadarko takeover. He suggested that Anadarko pay $5.2 billion to $14.2 billion, plus attorney fees.
Anadarko jumped 12 percent to $96.90 at 2:32 p.m. in New York trading after climbing as high as $98.78.
The lawsuit is Tronox Inc. v. Anadarko Petroleum Corp., 09-ap-01198; and the bankruptcy is Tronox Inc., 09-bk-10156, both in U.S. Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporters on this story: Tiffany Kary in New York at tkary@bloomberg.net; Del Quentin Wilber in Washington at dwilber@bloomberg.net; Jim Snyder in Washington at jsnyder24@bloomberg.net
To contact the editors responsible for this story: Andrew Dunn at adunn8@bloomberg.net; Steven Komarow at skomarow1@bloomberg.net; Jon Morgan at jmorgan97@bloomberg.net David E. Rovella
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