STAMFORD, Conn., Dec. 12, 2013 /PRNewswire/ -- Tronox Limited (NYSE: TROX) today issued the following statement in response to the Dec.12, 2013, U.S. federal bankruptcy court ruling in the case Tronox Incorporated vs. Anadarko Petroleum Corp:
(In 2005, Tronox was created as a spinoff of the Kerr-McGee Corporation. Kerr-McGee was subsequently acquired by Anadarko Petroleum Corp. Tronox Incorporated is the predecessor company of Tronox Limited.)
Ruling in favor of the plaintiff in Tronox Incorporated vs. Anadarko Petroleum Corporation, the United States Bankruptcy Court for the Southern District of New York found that Kerr-McGee acted with intent to delay and hinder Tronox's creditors when it spun off Tronox Incorporated. The court found Anadarko liable and indicated an ultimate damages award of $14.5 billion, subject to a set off against claims that Anadarko filed as a creditor in Tronox Incorporated's 2009 bankruptcy filing. The value of those claims will be determined following the submission of additional court papers.
Tronox will receive no immediate or direct benefit from the Dec. 12 ruling. Instead, 88 percent of the judgment will go to trusts and other governmental entities to remediate polluted sites. The remaining 12 percent of any funds ultimately received will be distributed to a tort trust to compensate individuals injured as a result of Kerr-McGee's environmental failures.
Tronox received a private letter ruling from the U.S. Internal Revenue Service confirming that the trusts that held the claims against Anadarko are grantor trusts of Tronox solely for federal income tax purposes. As a result, subject to a final damages determination by the court and potential appeal, Tronox Limited should be entitled to tax deductions equal to the amount spent by the trusts to remediate environmental matters and to compensate the injured individuals. These deductions will accrue over the life of the trusts as the funds received by the judgment are spent. Tronox believes that these expenditures and the accompanying tax deductions may continue for decades, and therefore, it expects that this tax benefit may continue for a lengthy period, potentially amounting to hundreds of millions of dollars annually.
Tronox Incorporated filed for bankruptcy in Jan. 2009, and emerged from bankruptcy in Feb. 2011. As part of the bankruptcy proceedings, the company, along with the United States Government, filed suit against Kerr-McGee for its fraudulent transfer of billions of dollars of pre-existing environmental and tort liabilities.
As part of its restructuring, Tronox settled the environmental claims of the U.S. and numerous state and local governmental agencies by contributing more than $300 million in cash and assets and the rights to any recovery in the suit against Kerr-McGee to numerous environmental and tort trusts established to resolve the outstanding legacy matters.
The bankruptcy settlement, including the transfer of the lawsuit to the trusts, allowed Tronox to emerge from bankruptcy as a reorganized company, free of these legacy liabilities, and to become a global leader in the mining and processing of titanium ore and other important minerals and the production of titanium dioxide, a pigment used in everyday life by consumers and industries around the world. We are steadfastly committed to environmental stewardship and sustainability in all aspects of our business operations.
For more information about Tronox, visit http://www.tronox.com.
Forward Looking Statements
Statements in this release that are not historical are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon management's current beliefs and expectations and are subject to uncertainty and changes in circumstances and contain words such as "believe," "intended," "expect," and "anticipate" and include statements about expectations for future results including revenues. The forward-looking statements involve risks that may affect the company's operations, markets, products, services, prices and other risk factors discussed in the company's filings with the Securities and Exchange Commission (SEC), including those under the heading entitled "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2012. Significant risks and uncertainties may relate to, but are not limited to, our ability to integrate the recently acquired mineral sands business including achieving the expected cost savings; financial, economic, competitive, environmental, political, legal regulatory and technological factors including, our access to unrestricted cash, compliance with our bank facility covenants, the price of our shares, general market conditions, our customers potentially reducing their demand for our products due to, among other things, the economic downturn, more competitive pricing from our competitors, increased supply from our competitors; operating efficiencies and other benefits expected. Unless otherwise required by applicable laws, the company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information or future developments.
Media Contact: Bud Grebey
Investor Contact: Brennen Arndt
SOURCE Tronox Limited