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5.15B Environmental Settlement in Anadarko v. Kerr-McGee

ADR Prof Blog by Andrea Schneider, Michael Moffitt, Sarah Cole,Art Hinshaw, Jill Gross and Cynthia Alkon.

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.

                        author

Michael Moffitt

Michael Moffitt is the Dean for University of Oregon School of Law, Orlando J. and Marian H. Hollis Professor of Law, and Associate Director, ADR Center.  Before joining the Oregon law faculty in 2001, Michael Moffitt served as the clinical supervisor for the mediation program at Harvard Law School and taught negotiation at… MORE >

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