For those law school ADR Evangelists looking for opportunities to woo colleagues from other doctrinal disciplines, the Anadarko / Kerr-McGee settlement yesterday should have you scrambling to talk with your faculty colleagues in Environmental Law and in Bankruptcy.
My short (and admittedly potentially still not as well-informed as it should be) version is this:
Kerr-McGee, an Energy & Chemical company, had among other things in its portfolio, considerable environmental damage associated with its nuclear fuel, wood creosote, and rocket fuel. At some point, Kerr-McGee spun off a company called Tronox, which incurred many of those environmental liabilities. Not terribly long after that, Anadarko Petroleum bought Kerr-McGee. Tronox fell into bankruptcy.
A trust representing the U.S., about a dozen states, and some tribes, sued Andarko and Kerr-McGee, and they argued that Andarko and Kerr-McGee should assume the responsibility for the Tronox portfolio of environmental liabilities. The US Attorney involved called it a “corporate shell game” aimed at avoiding liability. And that argument won the day.
The settlement is larger than the BP Settlement (although without the publicity). It includes $4.4B in various settlement trusts around the country. Pretty DOJ graphic available here.
Anadarko stock prices “soared” on news of the $5.15B settlement, as there had been speculation that it could reach far higher.
The National Law Journal story is available here. Reuters here. NYT here.