* Tronox trust wants $25 bln for environmental cleanup
* Trust: 2005 spin-off that created Tronox was fraudulent
* Sides tried unsuccessfully to settle dispute
By Nick Brown
NEW YORK, July 24 A trial between oil and gas
producer Anadarko Petroleum and a trust for paint
materials company Tronox Inc resumed on Tuesday after
the sides failed to settle their $25 billion dispute over
environmental cleanup costs.
Anadarko, the defendant, was expected to call witnesses,
starting with Joseph Flake, a former vice president at
Kerr-McGee Corp, the company now owned by Anadarko that created
Tronox through a 2005 spin-off.
Tronox, which went bankrupt in 2009 and emerged last year,
established a trust to pay billions of dollars in environmental
cleanup claims at more than 2,000 polluted locations. The
trust's main asset is the lawsuit against Anadarko, and money to
fund the trust will come from any proceeds of that litigation.
The trust says Anadarko, which now owns Kerr-McGee, is
liable for the cleanup costs. It argues that the Tronox spin-off
was fraudulent because it burdened Tronox with a heap of
environmental liabilities that rendered it insolvent from the
The trust is demanding $15 billion in assets and another $10
billion in interest for cleanup costs, though some analysts say
a settlement would be no higher than $2.5 billion.
The U.S. Department of Justice and the Environmental
Protection Agency have joined the Tronox trust in the fight.
Earlier this month, Anadarko shares climbed on news that the
sides would halt the trial for a week to try to hammer out a
settlement, but came back to earth after the talks failed.
In afternoon trading on the New York Stock Exchange on
Tuesday, Anadarko shares fell $2.70, or 3.8 percent, to $67.59,
while Tronox shares fell $5.35, or 4.6 percent, to $111.30.
John Hueston, a lawyer for the Tronox litigation trust,
declined to comment on whether future litigation talks were
planned. John Christiansen, a spokesman for Anadarko, also
declined to comment, but has said in the past the company would
prefer to settle the dispute consensually.
Tronox makes titanium dioxide used in paints.
The trial is taking place in U.S. Bankruptcy Court in