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DuPont, Corteva, and Chemours announce resolution of legacy PFAS claims

January 27/2021

MOSCOW (MRC) -- DuPont de Nemours, Inc., Corteva, Inc. and The Chemours Company announced on Friday that they have entered into a binding memorandum of understanding containing a settlement to resolve legal disputes originating from the 2015 spin-off of Chemours from E. I. du Pont de Nemours and Company (EID), said Chemweek.

Cmpanies aimed to establish a cost sharing arrangement and an escrow account to be used to support and manage potential future legacy per- and polyfluoroalkyl substances (PFAS) liabilities arising from events prior to 1 July 2015, the day the spin-off was completed.

Chemours filed suit against DuPont in June 2019, alleging DuPont stuck it with environmental liabilities tied to perfluorooctanoic acid (PFOA), a bio-persistent PFAS chemical used to produce Teflon. The suit claimed that DuPont vastly underestimated the liabilities assigned to Chemours under the separation agreement and chose a spin-off specifically to maximize the offloading of liabilities.

The agreement replaces the February 2017 PFOA Settlement and subsequent amendment to the Chemours Separation Agreement.

According to the terms of the cost sharing arrangement, Chemours agrees to a 50-50 split with DuPont and Corteva, DuPonts former agricultural business, of certain qualified expenses over a term not to exceed twenty years or $4 billion of qualified spend and escrow contributions.  Under the existing Letter Agreement from 1 June 2019, DuPont and Corteva will each bear 50% of the first USD300 million (up to USD150 million each) and thereafter, DuPont bears 71% and Corteva bears the remaining 29%. DuPont's share of the potential USD2 billion would be approximately USD1.36 billion and Corteva's approximately USD640 million. 

The companies also agree to establish a USD1 billion maximum escrow account to address potential future PFAS liabilities. Subject to the terms of the arrangement, contributions to the escrow will be made by Chemours, on one hand, and DuPont and Corteva, on the other hand, annually over an eight-year period.  Over such period, Chemours will deposit a total of USD500 million into the account and DuPont and Corteva will deposit an additional USD500 million pursuant to the terms of their existing Letter Agreement. The escrow provides for a one-time replenishment mechanism if the escrow account balance has less than USD700 million at 31 December 2028.

After the term of this arrangement, Chemours' indemnification obligations under the Chemours Separation Agreement would continue unchanged, subject to certain exceptions set forth in the memorandum of understanding. Chemours will waive specified claims, including claims regarding the construct of its 2015 spin-off from EID. DuPont, Corteva and Chemours will dismiss the pending arbitration regarding those claims.

In addition, DuPont, Corteva and Chemours have agreed to resolve the matters in the Ohio multi-district PFOA litigation for USD83 million. DuPont will contribute USD27 million, Corteva will contribute USD27 million and Chemours will contribute USD29 million to the settlement. The agreement resolves approximately 95 pending cases as well as unfiled matters. The case of Travis and Julie Abbott v. E.I. du Pont de Nemours and Company is not included in the settlement and is presently pending appeal. These amounts are not subject to the new cost sharing arrangement.

Ed Breen, DuPont Chairman and CEO; Jim Collins, Corteva CEO and Mark Vergnano, Chemours President and CEO said in a joint statement that the agreement will provide a measure of security and certainty for each company and our respective shareholders using a transparent process to address and resolve any potential future legacy PFAS matters."

It was erlier reported, DuPont is investing USD400 million in the production capacity of Tyvek nonwoven fabric made from high density polyethylene (HDPE) at its site in Luxembourg. A new building and a third work line at the production site will be constructed. The launch of new facilities is scheduled for 2021.

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

The DuPont Corporation, founded in the USA in 1802, operates in more than 70 countries. The company produces specialty chemicals, offers goods and services for agriculture, food production, electronics, communications, security and protection, construction, transport and light industry. In Russia, DuPont has 100% control over the DuPont Khimprom plant since 2005, and in 2006 established a joint venture between DuPont - Russian Paints and Russian Paints.
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, neftegaz, petrochemistry, Chemours, DuPont.
Category:General News
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