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Company requests reduction in lawsuit payout

Environmental advocates in Texas are watching a case that involves waste cleanup in Pennsylvania after allegations that a petroleum company exposed town residents to environmental materials that caused cancers in some small towns. The federal government wants Anadarko Petroleum Corp. to pay the full amount assessed against it of more than $20 billion. The company is asking for a reduction ranging from $850 million to $4 billion even though it had lost a lawsuit in Dec. 2013. A U.S. Bankruptcy judge had previously recommended a payment range of between $5.2 billion and $14.2 billion plus legal fees in the case.

The federal government claims it needs to clean up 2,772 locations and pay about 8,100 plaintiffs who suffered from the contamination and is objecting to the reduced amounts proposed by Anadarko in the business dispute.

The town has suffered the deaths of numerous residents since the environmental damage. Anadarko wants to cap damages at less than 50 percent of the average claim of almost $180,000. The court handed down a 166-page opinion in the case, and a trust that is paying cleanup costs said that the company needs to held liable for a higher amount. The trust wants to ensure that the plaintiffs receive everything that is due them financially. The case began when the petroleum giant purchased another company, Tronox, that couldn't support its environmental liabilities. It filed for bankruptcy in 2009. A judge determined that the original company should not have transferred those obligations to Tronox.

A large lawsuit with potential obligations of this size could easily bankrupt a company. A business lawyer might be able to represent a company involved in such a matter and attempt to minimize its exposure.

Source: Bloomberg, "Anadarko Kerr-McGee Damages Cuts Opposed by Tronox Trust", Tiffany Kary, February 13, 2014

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