Back in April, Texas oil company Anadarko Petroleum Corp. reached a settlement with Tronox Inc., a company which spun off Kerr-McGee Corp. in 2005 before the latter was acquired by Anadarko in 2006. The settlement concerned billions of dollars connected to environmental cleanup and public health issues which originated from before the Anadarko acquisition.
After its spin-off, Tronox filed for bankruptcy and its creditors—including the U.S. Department of Justice—sued Kerr-McGee and Anadarko over massive environmental liabilities. A total of $25 billion was sought in order to fund the cleanup of over 2,000 contaminated sites nationwide. The case got particularly messy—no pun intended—when Tronox creditors sought to show that the company’s spinoff was a fraudulent transfer, which is illegal under bankruptcy law.