$4 billon settlement to protect Chemours, DuPont, Corteva against legacy PFAS liabilities

FAYETTEVILLE — Two companies with plants in Bladen County and a third barely more than a year old have resolved their legal disputes in a $4 billion settlement.

DuPont, Chemours and Corteva reached the agreement in 2020 and made the announcement three weeks into the new year. It attempts to protect all three against “potential legacy PFAS liabilities,” a joint statement from the three CEOs says.

“The agreement will provide a measure of security and certainty for each company and our respective shareholders using a transparent process to address and resolve any potential future legacy PFAS matters,” said Ed Breen, DuPont chairman and CEO; Jim Collins, Corteva CEO; and Mark Vergnano, Chemours president and CEO.

PFAS is an acronym for per- and polyfluoroalkyl substances, a group of chemicals known as “forever chemicals” that have been in use for decades. The compounds have been used to make consumer products like cookware, food packaging and stain repellents.

GenX is among them, and has been in the news in Bladen County a great deal since the 2017 newspaper story out of Wilmington that said the chemical compound was being released into and contaminating the Cape Fear River. Since then, it has been discovered in the air and groundwater in areas near the Fayetteville Works site on the Bladen-Cumberland county line. Chemours and DuPont have plants there; the Cape Fear supplies drinking water to thousands down the river, including in Wilmington.

Chemours is a 2015 spinoff from DuPont. Corteva was the Agriculture Division of DowDuPont until becoming an independent company on June 1, 2019.

In part the settlement, according to a release from Chemours, will:

• Establish a cost sharing arrangement and an escrow account to be used to support and manage potential future legacy PFAS liabilities arising out of pre-July 1, 2015 conduct.

• Resolve the ongoing matters in the multi-district PFOA litigation in Ohio between DuPont, Corteva and Chemours. PFOA is an acronym for perfluorooctanoic acid, more colloquially known as C8. In 2009, DuPont started phasing out C8 in favor of GenX.

• Sets up a cost sharing agreement. DuPont and Corteva together, on one hand, and Chemours, on the other hand, agree to a 50-50 split of certain qualified expenses incurred over a term not to exceed 20 years or $4 billion of qualified spend and escrow contributions in the aggregate. DuPont and Corteva’s 50 percent will be limited to $2 billion including qualified expenses and escrow contributions. Under the existing Letter Agreement from June 1, 2019, DuPont and Corteva will each bear 50 percent of the first $300 million (up to $150 million each) and thereafter, DuPont bears 71 percent and Corteva bears the remaining 29 percent. DuPont’s share of the potential $2 billion would be approximately $1.36 billion and Corteva’s approximately $640 million.

• Establish between the companies a $1 billion maximum escrow account to address potential future PFAS liabilities. Subject to the terms of the arrangement, contributions to the escrow will be made by Chemours, on one hand, and DuPont and Corteva, on the other hand, annually over an eight-year period. Over such period, Chemours will deposit a total of $500 million into the account and DuPont and Corteva will deposit an additional $500 million.

The escrow provides for a one-time replenishment mechanism if the escrow account balance has less than $700 million at Dec. 31, 2028.

• Resolve the matters between DuPont, Corteva and Chemours in the Ohio multi-district PFOA litigation for $83 million.

Among Bladen County businesses contributing to the tax base, Chemours is second only to Smithfield Foods. The international giant of a chemical company in 2020 had net sales of $5 billion and adjusted net income of $329 million.