Kullman Supports Chemours on PFAS Liability
Former DuPont chief executive Ellen Kullman has upended the dispute between DuPont and Chemours over which company is liable in lawsuits over spills of perfluorinated compounds (including PFOA and C8, collectively known as PFAS) into US waterways.
While DuPont contends that its spinoff now has full liability for any fines under the companies’ 2015 separation agreement, Kullman said in an Oct. 18 court filing that the former parent company “never intended” to saddle the spinoff with crushing amounts of liability for environmental cleanups and other litigation.
“This was not consistent with my intent or the intent of DuPont’s board in approving the terms of the spin-off,” said Kullman, who resigned as CEO and chairman of the Delaware company the same year, following a protracted fight with an activist shareholder that eventually led to the breakup of the venerable US company and the subsequent merger with Dow.
In a statement, DuPont said Kullman’s assertions “are entirely inconsistent with the facts as reflected in documents from the time and do not accurately reflect the process in which she directly participated in her role as Chair of the Board and CEO.”
DuPont said it would “vigorously” defend itself against the claims in the complaint and our rights under the Separation Agreement.”
In a 64-page lawsuit filed in May and unsealed in early July, chemical Chemours is suing DuPont to recover or avoid paying thousands of dollars in compensation for spills of the chemicals. The chemical producer claims that the only reason for its being spun off was for DuPont to avoid paying for a cleanup.
Chemours claims also that DuPont underestimated the liabilities. The company is attempting to nullify a clause in the separation agreement requiring it to indemnify DuPont from any future environmental liability going forward.
The former parent’s assumptions that the spinoff was solvent enough to absorb all the liabilities as well as estimates of the potential payout sums were “systematically and spectacularly wrong,” Chemours said.
Due in part to unsealed filings related to its lawsuit against DuPont, Chemours earlier this month became the subject of a class action suit filed in Delaware federal court by a pension fund for Boston electricians, which invested in the company.
The fund said Chemours owes it “hundreds of millions of dollars” for concealing the true extent of its liabilities, which when the sum became known, caused the stock to plummet.
This constituted a $560 million shareholder loss and a downgrading by analysts.