(Updates throughout with comments from Anadarko's spokesman,
latest stock quote.)
The U.S. has filed a civil suit against Anadarko Petroleum Corp.
(APC), alleging the independent oil and natural-gas producer
fraudulently attempted to avoid hundreds of millions of dollars in
environmental liabilities.
The allegations stem from the company's corporate spin-off of
Kerr-McGee Corp. and its Tronox entities, according to Lev Dassin,
acting U.S. Attorney for the Southern District of New York and
George Pavlou, the Acting Administrator for Region 2 of the
Environmental Protection Agency.
But Anadarko said in its own filings, Tronox attributed its
deteriorating financial condition to the downturn in the housing
and construction markets. As a result, Anadarko said Tronox's woes
were unrelated to Anadarko and Kerr-McGee.
"We conduct our business with the utmost integrity, and we are
not responsible for Tronox's financial condition," said Anadarko
spokesman John Christiansen.
Kerr-McGee, which has been involved in oil, gas and mining
industries since the 1920s, had discontinued many of its operations
by 2000 but was still responsible for significant environmental
liabilities. The company undertook a series of mergers starting in
2001 that converted the original parent company into a subsidiary
of a new "clean" parent company, the U.S. Attorney's office
said.
As part of its reorganization, Kerr-McGee took in $537.1 million
of net proceeds from $550 million debt that the chemical subsidiary
remained obliged to service. In 2005, it attempted to sell off its
chemical business, which had been renamed to Tronox., and when a
sale became unsuccessful, it elected to spin off Tronox in an
initial public offering. Three months later, having been free of
its environmental liabilities, Kerr-McGee was acquired by Anadarko
for $18 billion.
Tronox, meanwhile, entered into bankruptcy and the U.S. moved to
intervene in the proceedings as Tronox was left without valuable
assets that could have satisfied environmental debts.
The complaint is seeking to reverse those transfers, or to
obtain a judgment from Anadarko and Kerr-McGee for the amounts of
those outstanding debts.
Christiansen, meanwhile, countered that Tronox was solvent and
adequately capitalized at the time of its IPO, saying Tronox was
able to issue stock at about $14 per share, and also enter into a
credit facility and issue unsecured bonds.
Cleanup costs at former Kerr-McGee sites include a now $280
million cleanup due to a New Jersey site, and other similar sites
throughout the U.S.
Anadarko closed down 3.9% amid a broad market decline.
-By John Kell, Dow Jones Newswires; 201-938-5285;
john.kell@dowjones.com