Jax Pesticide Cleanup Delayed In Court

By Jacksonville Business Journal

Cleanup of the toxic former site of Kerr-McGee Chemical Inc. remains tied up in a bitter legal dispute over who is liable for the environmental liabilities.

Kerr-McGee is now demanding that former subsidiary Tronox Inc. honor its contract that spun it off into an independent company or allow Kerr-McGee to release $100 million in escrow for environmental liabilities, including the 35-acre property at 1611 Tallyrand Ave.

Tronox has been in Chapter 11 bankruptcy protection for 17 months, but has yet to file a plan. Kerr-McGee is alleging in papers filed last week in U.S. Bankruptcy Court that Tronox has demonstrated that it would reject the separation agreement that made Kerr-McGee responsible for half of the cleanup costs for certain sites. Anadarko, which has bought Kerr-McGee, said if Tronox rejects the agreement, it will release the reserve and record it as income.

Kerr-McGee bought Tronox Inc. in 2006 and spun off the subsidiary as an independent company, transferring between $400 million and $900 million in environmental liabilities to Tronox. Five months after the spin-off, Anadarko Petroleum Corp. bought Kerr-McGee.

Tronox sued Anadarko and Kerr-McGee in May 2009, alleging its former parent structured the spinoff so that it would fail, saddling it with legacy liabilities including 35 former Kerr-McGee sites in the federal Superfund program. Tronox said it spent $118 million in Kerr-McGee liabilities before it toppled and filed for bankruptcy in January 2009.

The U.S. Environmental Protection Agency expects the environmental containment of long-time pesticide and fertilizer plant on the St. Johns River to cost $19 million to $20 million, but the cleanup was derailed when Tronox filed for bankruptcy.

Tronox has indicated that it would use any proceeds from its lawsuit against Kerr-McGee to pay the federal government for cleanup costs.

Copyright 2010 American City Business Journals

http://jacksonville.bizjournals.com/jacksonville/stories/2010/07/12/daily3.html?ana=thestreet

Copyright bizjournals.com 2010

More from Commodities

Watch This If You're Wondering How Much Gold to Have and When to Sell

Watch This If You're Wondering How Much Gold to Have and When to Sell

How Can Gold Continue This Upward Momentum?

How Can Gold Continue This Upward Momentum?

Week Ahead: Investors Keep Economy in Check as Trade, North Korea Talks in Limbo

Week Ahead: Investors Keep Economy in Check as Trade, North Korea Talks in Limbo

Oil Rally Steadies Even as Potential Supply Disruptions Persist

Oil Rally Steadies Even as Potential Supply Disruptions Persist

The Outlook for Gold Prices Looks Awful Even With 10-Year Yields Above 3%

The Outlook for Gold Prices Looks Awful Even With 10-Year Yields Above 3%