In the case of Anadarko Petroleum (APC), which has built itself into a leader in exploration and production of oil and gas, investors only needed a little patience. Dark clouds have hovered above Anadarko for quite some time. The company has fought a lengthy lawsuit with the creditors of Tronox (TROX), following Tronox's 2005 spin-off from the energy and chemical company Kerr-McGee.
As Christopher Helman described it in Forbes, Tronox was created by Kerr-McGee as "a kind of pit of despair into which [Kerr-McGee] loaded up decades of toxic environmental liabilities and toxic tort claims, balanced them out with a handful of assets, then spun it out as a standalone public company." Then Anadarko acquired Kerr-McGee in 2006, supposedly without the taint of Tronox's messes. Tronox went bankrupt in 2009. Major litigation followed.
On Thursday, investors' persistent belief in Anadarko paid off.
Anadarko agreed on Thursday to pay more than $5.15 billion to clean up areas across the U.S. polluted by nuclear fuel, wood creosote and rocket fuel waste that caused cancer and other health problems. Anadarko assumed this liability through its 2006 acquisition of Kerr-McGee, its opponents argued.
Anadarko saw it another way. Company officials have claimed that the environmental liabilities belonged to Tronox. I happen to agree. The spin-off of Tronox, which then filed for bankruptcy, happened before Anadarko's purchase.