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Dec. 12, 2013 /PRNewswire/ -- Tronox Limited (NYSE: TROX) today issued the following statement in response to the Dec.12, 2013, U.S. federal bankruptcy court ruling in the case
Tronox Incorporated vs. Anadarko Petroleum Corp:
(In 2005, Tronox was created as a spinoff of the Kerr-McGee Corporation. Kerr-McGee was subsequently acquired by Anadarko Petroleum Corp. Tronox Incorporated is the predecessor company of Tronox Limited.)
Ruling in favor of the plaintiff in
Tronox Incorporated vs. Anadarko Petroleum Corporation, the United States Bankruptcy Court for the Southern District of
New York found that Kerr-McGee acted with intent to delay and hinder Tronox's creditors when it spun off Tronox Incorporated. The court found Anadarko liable and indicated an ultimate damages award of
$14.5 billion, subject to a set off against claims that Anadarko filed as a creditor in Tronox Incorporated's 2009 bankruptcy filing. The value of those claims will be determined following the submission of additional court papers.
Tronox will receive no immediate or direct benefit from the
Dec. 12 ruling. Instead, 88 percent of the judgment will go to trusts and other governmental entities to remediate polluted sites. The remaining 12 percent of any funds ultimately received will be distributed to a tort trust to compensate individuals injured as a result of Kerr-McGee's environmental failures.
Tronox received a private letter ruling from the U.S. Internal Revenue Service confirming that the trusts that held the claims against Anadarko are grantor trusts of Tronox solely for federal income tax purposes. As a result, subject to a final damages determination by the court and potential appeal, Tronox Limited should be entitled to tax deductions equal to the amount spent by the trusts to remediate environmental matters and to compensate the injured individuals. These deductions will accrue over the life of the trusts as the funds received by the judgment are spent. 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.