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DuPont, Chemours in $4 Billion ‘Forever Chemicals’ Cost Pact (2)

Jan. 22, 2021, 8:44 PM

DuPont de Nemours Inc. and Chemours Co. agreed to a $4 billion settlement of a dispute over environmental liabilities shifted to Chemours after it was spun off in 2015.

The accord, which also includes DuPont’s former seed business Corteva Inc., covers payments for liabilities tied to a class of chemicals known as PFAS, the companies said in a statement on Friday. DuPont and Corteva will split “certain qualified expenses” 50-50 with Chemours, the companies said. They specified expenses incurred over a term of 20 years or $4 billion at most.

PFAS are widespread in the environment and human blood after decades of use to make things slippery, nonstick or waterproof. Their bonds are so stable that they’re known as “forever chemicals.” Used to make items like carpets, fabrics and firefighting foams, they’ve been found at high levels in some areas, particularly around airports and Air Force bases, prompting concerns about drinking water and creating costs for municipal water systems and states.

QuickTake: Why Action on ‘Forever Chemicals’ Is Taking So Long

Studies have linked them to diseases like cancer, immune harm and other ills. Their dangers were the subject of the 2019 movie “Dark Waters,” featuring Mark Ruffalo as a crusading lawyer.

The Real Lawyer

Under the $4 billion accord, DuPont and Corteva are each responsible for half of their first $300 million; after that, DuPont covers 71% and Corteva 29%. Of the $2 billion maximum they could shoulder together, therefore, DuPont’s share would be about $1.36 billion and Corteva’s about $640 million, the companies said in the statement.

As part of the agreement, the companies will pay $83 million to resolve almost 100 cases lined up for trial in federal court in Columbus, Ohio. DuPont and Corteva each will contribute $27 million, while Chemours will pay $29 million. The deal brings to $753 million the total DuPont and Chemours have paid to resolve about 3,600 suits over the chemicals.

Robert Bilott, a Cincinnati-based lawyer for those suing DuPont over PFAS in the consolidated Ohio litigation, said he was pleased with the $83 million settlement. The deal allows injured residents to be compensated “without the need for additional lengthy and expensive trials,” Bilott said in a statement.

In one of the first cases to go to trial, in 2017, Bilott -- the lawyer Ruffalo played in the movie -- won a $12.5 million verdict against DuPont on behalf of Kenneth Vigneron, who claimed PFAS caused his testicular cancer.

‘Unlimited’ Liabilities

Chemours spun off from E.I. DuPont & Co. in 2015 and took on environmental liabilities generated by the chemical maker. Two years later, DuPont’s parent joined with Dow Chemical Co. in a $130 billion merger, creating DowDuPont Inc. In 2019, DowDuPont separated into three companies, including Dow, DuPont de Nemours and Corteva. E.I. DuPont is now a unit of Corteva, company officials said.

The chemicals had been a concern for E.I. DuPont even before the spinoff. At the time, it estimated that cleanup costs would be $295 million to $945 million, and had already stopped making some versions of the chemicals, which are an entire class of compounds numbering in the thousands.

Chemours sued DowDuPont in 2019, arguing it hadn’t signed up to cover “unlimited” liabilities. A judge ruled last year that Chemours must arbitrate the dispute. The companies said the settlement resolves the ongoing arbitration.

Part of the accord is a $1 billion maximum“escrow account” to cover expenses tied to future PFAS cases, to which the companies will contribute annually over an eight-year period. Chemours is responsible for half, while DuPont and Corteva will split the other half.

The case is Chemours Co. v. DowDuPont Inc., 2019-0531, Delaware Chancery Court (Wilmington).

(Updates with cost breakdowns in fifth and last paragraphs. An earlier version of this story incorrectly described the spinoff.)

--With assistance from Luzi Ann Javier.

To contact the reporters on this story:
Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net;
Tiffany Kary in New York at tkary@bloomberg.net;
Tony Robinson in New York at trobinson72@bloomberg.net

To contact the editors responsible for this story:
David Glovin at dglovin@bloomberg.net

Peter Jeffrey, Steve Stroth

© 2021 Bloomberg L.P. All rights reserved. Used with permission.

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