Chemical manufacturer Tronox Ltd. said the bulk of what is anticipated to be a multibillion dollar judgment against Anadarko Petroleum Corp. will go to clean up pollution at environmental sites that Tronox inherited from Kerr-McGee Corp.
Most of the money — 88 percent — will go to trusts and other governmental entities to remediate polluted sites. The remaining 12 percent will be distributed to a tort trust to compensate individuals injured as a result of Kerr-McGee's environmental failures.
Tronox was created as a spinoff of Oklahoma City-based Kerr-McGee in 2005, before Kerr-McGee was acquired by Houston-based Anadarko in a transaction valued at more than $18 billion. A federal judge ruled Thursday that Kerr McGee and Anadarko acted improperly in the merger and that Kerr McGee foisted billions of dollars worth of environmental liabilities onto Tronox before the Anadarko sale.
Anadarko could face a final judgment of $5 billion to $14 billion in the case.
Tronox, formerly based in Oklahoma City, said that the IRS confirmed that the business could receive hundreds of millions of dollars in tax deductions from money the environmental trusts spend to clean up environmental sites and compensate injured individuals.
“Tronox believes that these expenditures and the accompanying tax deductions may continue for decades, and therefore, it expects that this tax benefit may continue for a lengthy period, potentially amounting to hundreds of millions of dollars annually,” the company said in a statement.
Tronox filed for bankruptcy in January 2009, and emerged from bankruptcy in February 2011.