The case, scheduled for U.S. Bankruptcy Court in Manhattan, will test whether the government can recover money years later from a successor to a polluting company, even when a bankruptcy has ostensibly cleaned the slate.
The lawsuit says The Woodlands, Texas-based Anadarko, the company that bought a piece of Kerr-McGee in 2006, is responsible because it was part of a "two-step fraudulent scheme" that transferred $15 billion in assets out of Kerr- McGee.
The U.S. is seeking that amount from Anadarko, plus another $10 billion to cover interest and appreciation since 2005, according to a lawyer involved in the case.
Not Responsible
Anadarko, among the biggest U.S. independent oil and gas companies by market value, says it's not responsible for Kerr-McGee's old liabilities. In July 31, 2009, court papers that sought, and failed, to have the suit dismissed, Anadarko said the lawsuit is trying to rewrite history. The company estimated in a March slide show for investors that the suit will cost about $250 million -- 1 percent of what the EPA is seeking.
"We conduct our business with the utmost integrity, and we are confident in the merits of our case," Anadarko General Counsel Bobby Reeves said in a March 15 statement.
On April 30, Anadarko said first-quarter profit rose to $2.16 billion on higher crude oil prices and a tax-settlement gain. It said it took an additional $275 million charge for the lawsuit, bringing the total for estimated costs to $525 million.
"We're confident in the merits of our case and also recognize there is value in removing uncertainty for our shareholders," spokesman Brian Cain said after the report. "If a settlement is not reached, we are prepared to defend our interests at trial." The company declined to comment further. Anadarko shares traded at $73.21, down 4.1 percent for the year.
Kerr-McGee Past
Kerr-McGee, founded in 1929 near Oklahoma City, has left a toxic legacy that stretches from uranium mines in the West to wood treatment plants in Mississippi and Pennsylvania, the EPA says. The company became notorious in the 1970s when labor activist Karen Silkwood died mysteriously after claiming that Kerr-McGee was contaminating her and others at its nuclear materials plant near Crescent, Oklahoma.