Pension investors win Anadarko environmental settlement

Class action over liabilities related to 2005 spinoff

Investors including US pension funds have won a $35m (€28.2m) settlement from Anadarko Petroleum and its Kerr-McGee subsidiary relating to environmental liabilities.
The case stems from the spinoff by Kerr-McGee of chemicals manufacturer Tronox in 2005. The investors claimed the company hid Tronox’s massive environmental liabilities before the sale.
Anadarko, the oil and natural gas giant, acquired controversial Kerr-McGee in 2006. From mid-2007 Tronox began disclosing it would have to drastically increase its spending on environmental remediation – which caused its shares to slump and eventually led to it filing for bankruptcy protection in January 2009.
Lead plaintiff in the case was New York-based hedge fund LaGrange Capital Partners LP but other plaintiffs included the Alaska Electrical Pension Fund – with the San Antonio Fire and Police Pension Fund and the Fire and Police Pension Association of Colorado also supporting as ‘movants’. The investors also won $2m from former auditor Ernst & Young.“The substantial payment of $37m makes the settlement an excellent result for the Class,” LaGrange’s lawyers wrote in a court motion. LaGrange was represented by Cohen Milstein Sellers & Toll and Gold Bennett Cera & Sidener.
The Alaska fund was represented by Robbins Geller Rudman & Dowd while the Colorado and San Antonio funds were represented by Bernstein Litowitz Berger & Grossmann.
US District Judge Shira Scheindlin in Manhattan had previously denied Anadarko’s motion to throw out claims that it was responsible for Kerr-McGee’s actions.
There is a separate, ongoing $25bn case brought by creditors and the US government in Manhattan bankruptcy court.
Before being taken over by Anadarko, Kerr-McGee was widely criticised for its role in the Western Sahara region and was in fact divested by several Norwegian investors including the Government Petroleum Fund. It also has had to pay numerous environmental penalties and fines.
Last month Anadarko said it was committed to resolving the Tronox litigation through informal negotiations.