Dow, DuPont may bear Teflon liabilities
Activist groups ask the companies to inform shareholders of potential payments before merger vote
DuPont Co. and Dow Chemical Co. must tell shareholders before next week’s merger vote that they may face exposure to costly potential damages from claims that a chemical used to make Teflon caused cancer and other ailments, community activists told the companies.
While DuPont is the named target of the 3,500 lawsuits filed by people living near a Teflon plant in Parkersburg, West Virginia, the company has claimed that Chemours Co., a spin-off it created last year, is required to pay any damages. Chemours indicated last week that it may fight efforts to force payment, saying it “retains legal defences” to DuPont’s claims of indemnification.
DuPont and Dow should tell shareholders before they vote on July 20 on the $59-billion (Dh216.6-billion) merger that the combined companies could end up getting stuck with the bill, Action Fund Network and Keep Your Promises DuPont wrote. The merger partners must also share updated federal guidance on how much of the Teflon chemical people can safely be exposed to and the potential liability at 19 polluted sites.
DuPont said in the filing Potential payments related to health claims from exposure to the Teflon chemical could reach $1.9 billion, according to Bloomberg Intelligence. DuPont last week was ordered by an Ohio jury to to pay more than $5.5 million to a man who developed testicular cancer after drinking water polluted with PFOA. It was the sixth case to be resolved, with 40 more remaining.
Chemours may try to break the indemnification clause in last year’s separation agreement because the potential liability is the biggest drag on the stock price, said a Bloomberg Intelligence analyst. that it has disclosed all information necessary under federal law. The Wilmington, Delaware-based company remains “committed to fulfilling all our legal and environmental obligations as it relates to PFOA,” spokesman Dan Turner said in an email.
According to the activists’ letter, in addition to already disclosed potential clean-up costs at 174 polluted sites, which could total $900 million, there are another 19 sites. The groups also cited a lack of disclosure about a May 16 report from the Environmental Protection Agency that lowered the amount of PFOA viewed as acceptable in drinking water, saying the change could spark more lawsuits.