Chemours Shareholder Suit Over DuPont Spinoff Liabilities Dismissed
Wednesday, November 3, 2021 2:00 pm
DELAWARE (From news reports) -- A Delaware judge dismissed a suit by Chemours Co. shareholders alleging directors misled them about the company's financial health and legal liabilities when it was spun off from a predecessor of DuPont de Nemours Inc. Chemours shareholders can't show misleading statements by directors left them facing "a substantial likelihood of liability," a Delaware Chancery Court judge concluded on Monday. The company was created in large part to wall off the rest of DuPont from lawsuits over environmental harm and health risks from a class of chemicals known as PFAS. "I find that the facts pled" in the investors' suits don't lay out evidence of "willful or negligent misconduct," Judge Sam Glasscock III said in his 63-page ruling. Greg Varallo, a lawyer for some of Chemours investors, declined to comment on Glasscock's ruling. Chemours was sued by investors after agreeing earlier this year to a $4 billion settlement with DuPont and Corteva Inc. to cover liabilities tied to PFAS, a chemical used in making DuPont products such as Teflon. Under the agreement, DuPont and Corteva will split "certain qualified expenses" 50-50 with Chemours, the companies said. They specified expenses incurred over 20 years or totaling $4 billion at most. Series of Verdicts
In the suit dismissed on Monday, disgruntled Chemours investors had alleged DuPont's decision to saddle the spin off with more than $2.5 billion in environmental liabilities crippled it from the start. They also claimed Chemours directors covered up the chemical company's impaired financial health through stock buybacks and dividends.
Investors also didn't produce enough evidence to show Chemours was insolvent at any time and directors' assessment the chemical company had a sufficient surplus to warrant dividends and stock repurchases was flawed, Glasscock wrote. The case is In RE The Chemours Company Derivative Litigation, No. 2020-0786, Delaware Chancery Court (Georgetown)
|