A historic settlement reached with Anadarko Petroleum Corp. and Kerr McGee has gone into effect, allowing funds to be disbursed for cleanups across the country, announced Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division, U.S. Attorney Preet Bharara of the Southern District of New York, and Assistant Administrator Cynthia Giles of the U.S. Environmental Protection Agency (EPA).

This settlement resolves fraudulent conveyance claims brought by the United States and the Anadarko Litigation Trust, the trust against Anadarko Petroleum Corporation and its affiliates, the defendants, in the bankruptcy of Tronox Inc. and its subsidiaries. Today, pursuant to the settlement agreement, the defendants paid $5.15 billion, plus interest, to the trust. The trust is expected to distribute more than $4.4 billion to fund environmental clean-up and for environmental claims. The settlement constitutes the largest payment for the clean-up of environmental contamination ever obtained in a lawsuit brought by the Department of Justice.

“This recovery will lead to cleanups across the country that will undo lasting damage to the environment, including contamination of tribal lands, by Kerr-McGee’s businesses,” said Assistant Attorney General Cruden. “This result emphatically demonstrates the Justice Department’s commitment to environmental justice for all Americans, and it fulfills the department’s promise to hold accountable those who pollute and those who try to foist their responsibility for cleanup on the American taxpayer.”

“The Kerr-McGee Corporation spent decades despoiling our nation’s natural resources, leaving a toxic legacy for communities across the nation, from Sidney, New York, to the Navajo nation,” said U.S. Attorney Bharara. “Then, Kerr-McGee tried to escape the consequences of its misdeeds by transferring its most valuable assets to affiliates, leaving an insolvent shell behind, unable to pay its environmental liabilities. As today’s historic payment shows, the government will not allow polluters to escape paying for the damage they inflict on our land, water and people, and we will hold accountable those who attempt to shield themselves from responsibility behind improper corporate transactions.”

“If you pollute the environment, you should be responsible for cleaning it up,” said EPA Assistant Administrator Giles. “From the Navajo Nation to low income neighborhoods across America, more than $4.4 billion will be put to work cleaning up toxic pollution. This historical environmental cleanup will have a lasting impact on American communities.”

As noted by U.S. District Judge Katherine B. Forrest, in approving the settlement in November, this case arises from a “series of transactions by the Kerr-McGee Corp. that resulted in the spin-off of Tronox, which Kerr-McGee left saddled with the massive environmental and tort liabilities it had accumulated over the course of decades of operating in the chemical, mining, and oil and gas industries, but without sufficient assets with which to address these liabilities.” For this reason, as the district court explained, both the United States and the Tronox estate, now represented by the trust, brought fraudulent conveyance claims against the defendants.

On April 3, 2014, the United States announced this settlement resolving the claims against the defendants, which was then subject to a period of public comment and judicial approval. After receiving and considering comments from the public, the United States sought approval of the settlement agreement, and on Nov. 10, 2014, the district court approved the settlement as “fair and reasonable.” The deadline for any appeals from the district court’s decision passed on Jan. 20, 2015, without any appeals having been taken and therefore the settlement agreement went into effect on Jan. 21, 2015.

Under the settlement agreement, the defendants paid $5.15 billion, plus interest from Apr. 3, 2014, to the trust. Pursuant to the terms of prior agreements in the Tronox bankruptcy, the government estimates that more than $4.4 million of this recovery will be paid to the United States, state governments, the Navajo nation and four environmental response trusts created in the bankruptcy to clean up contaminated property. An estimated more than $600 million will be paid to a trust created to pay tort victims.

This case was handled by the Environmental Protection Unit and the Tax and Bankruptcy Unit of the Office’s Civil Division. Assistant U.S. Attorney Robert William Yalen is in charge of the case, which he handled along with Assistant U.S. Attorney Joseph Pantoja and Alan S. Tenenbaum, Katherine Kane, Frederick S. Phillips, Marcello Mollo, and Erica Pencak of the Department of Justice’s Environment and Natural Resources Division.