The oil company YPF and Spain’s Repsol agreed pay $575 million to close the trial on the case Maximuma complaint for environmental damage started in 2005 by the state of New Jersey (United States:).
The transaction amount will be paid equally by both firms, for which each of them has promised to pay $287.5 million. Repsol participates in the settlement because the lawsuit was initiated when the Spanish company was a shareholder of YPF.
As it will be recalled, the Argentine state expropriated The actions of Repsol in 2012, which led to a trial unfavorable to the state and whose first sentence was known days ago. It was a lawsuit initiated by the Burford fund, which would be able to claim about 3.5 billion dollars.
Tonight, YPF reported that it has formalized a deal with the Maxus Settlement Fund and stated that “if certain conditions are met, it will dismiss all actions brought against YPF and Repsol and grant a full release and acquittal of claims filed by said Trust for up to $14 billion”.
The company recalled that:
-In 1992 YPF was privatized and José Estenssoro took over. In 1995 and under the same management, already privatized YPF implemented an international expansion strategy and acquired Maxus, a North American oil and gas company.
– This company, with activities in various countries of the world (United States, Bolivia, Indonesia, Ecuador and Venezuela) was the beginning of a corporate strategy which in the light of the time was presented as attractive for the company.
Years earlier, in 1986, Maxus had sold his chemical business to Occidental Chemical Corporation and agreed to compensate him for the Environmental liabilities derived from its operations.
– Subsequently, in 2005 the State of New Jersey sued Occidental and Maxus -then adding YPF and Repsol- for the Pollution of the Passaic River (10km from NYC) w/ Chemical waste.
– Consequentially, Occidental claimed its indemnity and Maxus, the company that YPF had acquired in 1995, honored its obligations until June 17, 2016, when it decided to file for bankruptcy and was subsequently declared bankrupt.
In June 2018 the Maxus Liquidation Trust is suing YPF and Repsol and some subsidiariesfor up to $14 billion in bankruptcy court for the District of Delaware, alleging that Maxus intended to hinder, delay or defraud its creditors.
the agreement
After years of litigation and negotiations on the Maxus Liquidation Trust and after obtaining YPF, in June 2002, a partial summary judgment from the bankruptcy court, YPF and Repsol have reached an agreement settlement agreement under which Maxus Liquidation Trust would waive the claims it has filed against YPF and Repsol in Delaware District Bankruptcy Court, as well as all current and future claims it may have against YPF and Repsol.
In exchangeYPF and Repsol agree to pay the Trust $287.5 million each, for a total of $575 millionYes, without YPF or Repsol assuming any liability.
This deal, that is subject to court approval and other conditions that must be met in the coming months, seeks to resolve a dispute that has been going on for nearly 20 years.
Likewise, YPF and Repsol have signed a settlement agreement with Occidental Chemical Corporation and certain of its affiliates, pursuant to which Occidental has agreed to release all claims it may have against YPF or Repsol, in relation to Maxus entities, the Passaic River and other areas subject to environmental remediation.
In this sense, both YPF and Repsol have also signed an agreement with various government agencies, including the Department of Justice acting on behalf of the US Environmental Protection Agency, and the states of Ohio and Wisconsin, under which the agencies governments have agreed not to file claims against YPF and Repsol similar to those already filed by the Maxus Settlement Trust.
Agreements with Occidental and the USA are also subject to certain conditions precedent.
If the conditions are met, the agreements will put an end to the dispute that has lasted for years, reaching a fair and reasonable solution for all parties, and which will allow YPF to continue to focus its efforts on generating value and employment, deepening growth of its production and focusing its efforts on the investments necessary to strengthen and diversify the Argentine energy matrix.
Source: Clarin
