In the largest environmental settlement ever won by the U.S. government, Anadarko Petroleum corp. has agreed to pay the Department of Justice (DOJ) $5.15 billion to settle fraud claims stemming from its 2006 acquisition of Kerr-Mcgee Corp.

According to the Wall Street Journal, the lawsuit alleged that just prior to being bought by Anadarko, Kerr-McGee intentionally shifted its chemical operation to subsidiary, Tronox Inc. In doing so, plaintiffs argue the company unfairly dumped liabilities on to Tronox, making it more attractive to buyers and allowing prospective deals to proceed without investigation into some questionable practices.

Tronox was not acquired in the deal with Anadarko, and plaintiffs say that the fraudulent shift of liabilities ultimately lead to bankruptcy in 2009. The issues surrounding Kerr-Mcgee’s chemical operations include exposing workers to uranium at processing sites, as well as contaminating sites throughout the United States.

Though Anadarko has agreed to pay a hefty fine to stop further litigation from the DOJ and Tronox, the deal could have run considerably higher. In Late 2013 a bankruptcy judge that sided with Tronox found Anadarko liable for up to $14.2 billion.

“This settlement agreement with the Litigation Trust and the U.S. Government eliminates the uncertainty this dispute has created, and the proceeds will fund the remediation and cleanup of the legacy environmental liabilities and tort claims,” said Anadarko Chairman, President and CEO Al Walker in a release.

The remediation consists of cleaning uranium and creosote debris at more than a thousand sites throughout the nation, the remainder will be used to settle legal claims filed by those who fell ill as a result of the contamination.  Protection against additional legal action covers 4000 sites.

The settlement clears Anadarko for additional exploration of oil and mineral reserves.


For more on environmental settlements check out these stories:

2nd Circuit keeps judge in Chevron pollution case

5th Circuit halts some BP oil spill payments

Compliance: Tell me how to read an environmental report