Issue Date: May 18, 2009
Tronox Sues Former Parent Kerr-McGee
Tronox, one of the world's largest makers of the white pigment titanium dioxide, is suing its former parent, Kerr-McGee, and Kerr-McGee's present owner, oil exploration firm Anadarko Petroleum. In a complaint it filed with the U.S. Bankruptcy Court for the Southern District of New York (where it filed for bankruptcy in January), Tronox says Kerr-McGee defrauded Tronox' creditors when it spun the unit off as an independent company through an initial public offering (IPO) in 2005. "Tronox was doomed to fail at the time of the spin-off, having been grossly undercapitalized, stripped of its most valuable assets and essential cash, and overburdened with legacy environmental, tort, and retiree liabilities," the company said in a statement. Anadarko says it isn't responsible for Tronox' financial condition. "Tronox was solvent and adequately capitalized at the time of its IPO," says an Anadarko spokesman. He points out that the company was able to sell its shares in the IPO, get a line of credit, and issue unsecured bonds.
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