A court document recently released by Chemours, manufacturer of refrigerant r134a, refrigerant gas r404a, HFC gas r407c, F-GAS r410a, air conditioning refrigerant gas r32, e tc, which was split from Dupont, showed that DuPont used a cruel approach to avoid the cost of cleaning up dangerous chemicals.
According to court documents, DuPont could have permanently stopped discharging its perfluorinated compound (PFAS) from its Fayetteville plant to the Cape Fear River nine years ago, but in order to force a spin-off company to take responsibility, DuPont decided not to do this.
The company filed a 64-page lawsuit against its former parent company DuPont, listing a series of shocking allegations. If these are true, the evil actions of the $1 billion company to escape the financial and legal responsibility for environmental disasters are exposed to the sun.
DuPont allegedly underestimated the true cost of its environmental purification. Instead, DuPont limits costs to well below the level that Chemours must pay. A compensation clause in the company's paper claims that DuPont will always get rid of the legal and financial burden.
According to court documents, DuPont “crafted a plan to split its Performance Chemicals Unit to form a new company called Chemours,, part of a plan to reduce its historical environmental responsibility.”
These documents were filed in the Delaware court and should have been confidential. However, when Chemours's lawyer failed to submit a public version before the deadline requested by the court, the Associated Press asked the Delaware Supreme Court to uncover the seals of these documents without doing anything. modify.
The document states that in 2010, DuPont commissioned “a blue ribbon team of company managers, scientists and engineers to find solutions to this recognized problem”. The company could have spent $60 million to completely terminate emissions, or $20 million to reduce emissions by 70%.
“But for DuPont, the best solution, even the most modest recommended solutions, is too much,” court documents wrote. Instead, after installing a $2.3 million system to eliminate a wastewater stream, DuPont decided to shut down the system by the end of 2013. Coincidentally, at that time, DuPont announced plans to divest Chemours - the company has a codename: "Beta project."
The Beta project focuses on DuPont's specialty chemicals division – it is the department that “causes DuPont to take on many environmental responsibilities” involving PFAS, including GenX.
The document reads: "Since this problem can be easily transferred to Chemours, why spend money to solve it?"
This is indeed the case. This year, Chemours, NC Environmental Quality and Cape Fear River Watch signed a consent order and imposed a $12 million fine on Chemours. According to the document, the consent order requires Chemours to "use the same technology that DuPont had previously refused to install."
When DuPont established Chemours as a subsidiary in the spring of 2015, it knew that the factory in Fayetteville had discharged PFAS to the Cape Fir River for more than 30 years. However, when the company discussed it privately, DuPont guaranteed that the company could clean up the environmental pollution at the Fayetteville factory by paying no more than $2 million. This figure is currently estimated at $200 million and does not include fines that may come from class actions.
In addition, Chemours needs hundreds of millions of dollars to repair several locations in New Jersey.
DuPont also underestimated the cost of resolving 3,500 lawsuits. These lawsuits were filed by people who had PFAS in drinking water near the Washington Works production line in Ohio/West Virginia. “These are serious cases. There are hundreds of cancer patients and others have other serious illnesses.
DuPont hired Deloitte to analyze potential litigation costs, and Deloitte estimates that DuPont will win 68% of litigation. "The remaining cases can be solved relatively cheaply" - $128 million, including defense attorney fees. But DuPont failed in every lawsuit. In less than two years, the jury awarded the victim $671 million, far exceeding five times the maximum amount of compensation DuPont had determined. DuPont then agreed to share the cost with Chemours.
DuPont split the debts of more than 80 factories into the company, most of which will not operate after the spin-off, and these debts include litigation costs related to asbestos and benzene exposure.
Chemours's legal documents stated that DuPont had greatly underestimated the cost to comply with a Delaware law that required the spin-off company to be solvent. If the real potential costs are revealed, it is clear that Chemours has almost gone bankrupt since the beginning.
In addition, DuPont also appointed three managers to the early board of directors, who apparently negotiated on behalf of Chemours. But the word "negotiation" is forbidden. On the contrary, the court documents call it "Orwell-style prosperity," and DuPont calls it "Calibration." After the spin-off in July 2015, Chemours became an independent company, and three members of the board of directors also returned to DuPont after resigning.
The document reads: "After the split, Chemours's situation is not very good." The company's share price has allegedly plummeted from $21 per share to $11.48 in one month and fell to $3.16 in six months. Up to 85%, the company also fired 1,000 employees.
In these legal documents, Chemours argued that DuPont set a precedent. “If the largest clean-up and legal costs are not meaningful, Chemours has unlimited responsibility, which means DuPont acknowledges that the entire split process is a scam.” Other companies can adopt the same strategy, from the environment. Get out of legal responsibility.
In a statement issued last Friday, DuPont said that Chemours’s lawsuit was “unfortunate” and “unfounded”. The company went on to say that the process of allocating debt to Chemours "was carried out as part of the standard spin-off operation."
Chemours asked the court to force DuPont to return the $4 billion it received from the company during the split to pay dividends to shareholders. Chemours also asked the court to cancel the liability ceiling and abolish the indemnity clause