Chemours Company: Lawbreaker Or Law-Abiding Citizen?

The Chemours Company is an American chemical company founded in 2015 as a spin-off from DuPont. Chemours manufactures and sells performance chemicals, including Teflon, titanium dioxide, and refrigerant gases. The company has been involved in several lawsuits and controversies regarding the environmental impact of its chemical products, particularly the contamination of water systems with toxic forever chemicals known as PFAS. In 2023, Chemours settled claims regarding water contamination for $592 million. The company has also faced legal action from shareholders, who alleged that Chemours understated the costs associated with cleaning up these long-lived chemicals. In 2024, three members of senior management were placed on administrative leave for delaying payments to vendors, violating the company's ethics standards.

Chemours' liability in the PFAS contamination case was $2 billion, not $780 million

Chemours, an American chemical company, has been at the centre of several controversies and lawsuits since its founding in 2015. The company has been accused of contaminating water systems with toxic "forever chemicals" and exposing the public to PFAS, leading to serious health risks.

In 2024, a U.S. judge ruled that Chemours must face shareholders' claims that it understated the costs of cleaning up certain long-lasting chemicals, with investors alleging that the company's liability was more than $2 billion, contrary to their statement claiming it to be "up to" $780 million. This discrepancy in the estimated liability figures is a critical aspect of the legal dispute.

The PFAS contamination case involves Chemours and two other chemical companies, DuPont de Nemours Inc. and Corteva Inc., which reached a settlement in June 2023 to resolve claims that they contaminated U.S. public water systems with toxic "forever chemicals." The settlement amount was agreed upon at $1.19 billion, with Chemours contributing $592 million and the remaining amount covered by DuPont and Corteva.

While the three companies deny the allegations, Chemours' liability in the PFAS contamination case is significant, estimated at $2 billion by shareholders, not the initially stated $780 million. This discrepancy highlights the potential financial impact of the contamination and the ongoing legal battles surrounding it.

Chemours' plant in Bladen County, North Carolina, was dumping a Teflon precursor into the Cape Fear River

The Chemours Company, an American chemical company, has been at the center of controversy due to its dumping of a Teflon precursor, GenX, into the Cape Fear River in North Carolina. This issue came to light when a Wilmington newspaper exposed in June 2017 that the company had been discharging GenX into the river for decades. The Chemours plant in Bladen County, North Carolina, was found to be responsible.

GenX is a key ingredient in making Teflon and other non-stick and water-resistant products. It is part of a broad family of highly fluorinated chemicals called PFAS, which have been linked to various health issues, including cancer, thyroid disorders, developmental and immune issues, and adverse effects on fertility and pregnancies. The contamination of the Cape Fear River, which serves as a source of water for hundreds of thousands of residents in the Wilmington area, raised alarms among the community.

The impact of this dumping was widespread, with GenX contamination found in the Cape Fear River as far as 100 miles downstream from the Chemours site and in rainwater samples taken up to seven miles from the plant. The North Carolina Department of Health and Human Services set a health goal of 140 parts per trillion or less for GenX in drinking water, while the U.S. Environmental Protection Agency (EPA) has established health advisories for two common PFAS chemicals, recommending levels below 70 parts per trillion.

In response to the discovery, multiple lawsuits were filed against Chemours and DuPont, the company from which Chemours spun off in 2015. These lawsuits sought damages and funding to study the health impacts of GenX and other discharged chemicals. In November 2023, a federal court authorized a class-action lawsuit, allowing residents along the Cape Fear River to take legal action against the companies for the alleged dumping of toxic GenX chemicals, impacting the drinking water and homes of more than 770,000 residents.

Chemours has taken steps to address the contamination, including submitting reports and proposals to the N.C. Department of Environmental Quality (DEQ) to reduce PFAS levels in the river and around the plant site. The company has also invested in new equipment, such as a thermal oxidizer, to reduce air emissions of GenX. However, the cleanup efforts have been met with skepticism by some members of the community, who argue that Chemours was legally forced to take these actions and question the effectiveness of the measures.

The controversy surrounding Chemours' dumping of GenX into the Cape Fear River highlights the ongoing struggle to balance industrial activities and environmental protection. It also underscores the importance of stringent regulations and oversight to ensure companies' compliance with environmental and health standards.

DuPont and Chemours settled 3,500 lawsuits for $670 million, but denied wrongdoing

The Chemours Company is an American chemical company that was founded in July 2015 as a spin-off from DuPont. Chemours manufactures and sells performance chemicals, including titanium dioxide, Teflon, and refrigerant gases.

In November 2024, DuPont and Chemours agreed to pay $670 million to settle 3,500 lawsuits filed by plaintiffs who alleged that their illnesses were caused by the chemical C8, used in the manufacture of Teflon and stain-resistant textiles for over six decades. The settlement included all pending claims, and both companies agreed to pay up to $25 million per year for the first five years of the settlement to cover any future claims, bringing the potential total to over $900 million.

The settlement was seen as a "sound resolution" by Chemours' general counsel and senior VP, David Shelton, who stated that it "settles all indemnification obligations between Chemours and DuPont for all of the approximately 3,500 claims... and allows us to move forward." However, both companies denied any wrongdoing, with Chemours declaring that "the settlement is not in any way an admission of liability or fault by DuPont or Chemours."

Shares for both companies rose after the announcement, with Chemours' shares increasing by over 15%. This may reflect investors' relief that the companies had resolved the lawsuits without admitting liability.

In addition to the 3,500 personal injury claims related to the C8 chemical, DuPont and Chemours have faced other lawsuits and allegations related to environmental pollution and toxic "forever chemicals." In June 2023, the two companies, along with Corteva, settled claims that they contaminated U.S. public water systems with toxic "forever chemicals" (PFAS) for $1.19 billion, with Chemours paying $592 million. Chemours is also being sued by the PA Attorney General for knowingly exposing the public to PFAS.

DuPont and Chemours are still discharging PFOA, a toxic compound, from their facilities

DuPont and Chemours are still discharging PFOA, a toxic compound used to make Teflon, from their facilities. In 2001, it was revealed that PFOA had contaminated the drinking water for 70,000 people near a DuPont factory in West Virginia. This led to pressure from the Environmental Protection Agency, forcing DuPont and other companies to phase out PFOA and agree not to use it after 2015.

However, recent data from the EPA's Enforcement and Compliance History Online database shows that both companies are still discharging PFOA. Rep. Harley Rouda (D-Calif.), who chairs the Environment Subcommittee of the House Committee on Oversight and Reform, sent a letter to DuPont and Chemours asking about their ongoing PFOA discharges. Rouda's letter specifically inquired about DuPont's Circleville Works plant in Ohio and Chemours' Washington Works facility in Parkersburg, West Virginia, the most notorious PFAS contamination site globally.

The continued releases of PFOA by DuPont and Chemours could indicate that they are still using the toxic substance, despite their public assurances to the contrary. This would constitute a serious breach of public trust. Alternatively, there may be other explanations for the discharges, such as the presence of PFOA in products or mixtures used at the facilities, or "legacy" PFOA remaining in the water.

The toxic compound PFOA, or perfluorooctanoic acid, is one of the thousands of fluorinated chemicals known as PFAS. These chemicals have contaminated the drinking water of an estimated 200 million-plus Americans and have been linked to various health issues, including kidney and testicular cancer, thyroid problems, high cholesterol, reproductive and developmental harm, and reduced vaccine effectiveness. Due to their persistence in the environment, PFOA and other PFAS are often referred to as "forever chemicals".

The ongoing discharges of PFOA by DuPont and Chemours highlight the need for decisive action to address the PFAS problem. This includes regulating and limiting PFAS in the environment, holding companies accountable for their use of toxic substances, and funding cleanup and drinking water treatment initiatives.

Chemours' board placed three senior executives on leave for delaying payments to vendors to obtain a bigger bonus

The Chemours Company is an American chemical company that was founded in July 2015 as a spin-off from DuPont. Chemours manufactures and sells performance chemicals, including Teflon, titanium dioxide, and refrigerant gases. In February 2024, the company's board placed three senior executives on administrative leave: CEO Mark Newman, CFO Jonathan Lock, and Financial Controller Camela Wisel. This decision followed allegations that these executives delayed payments to vendors to meet free cash flow targets and obtain larger bonuses.

The delayed payments were originally due in the fourth quarter of 2023 but were pushed back to the first quarter of 2024. This manipulation of payables and receivables positively impacted the company's reported cash flow targets for the year. The Chemours board determined that these actions violated the company's standards for ethics and transparency. An internal audit revealed that the executives' actions lacked transparency and breached the company's code of ethics related to disclosure.

The matter was initially brought to light by an anonymous report made to the Chemours Ethics Hotline. However, this report was not escalated to the general counsel or audit committee promptly due to inadequate controls and procedures for evaluating and escalating hotline reports. As a result, Chemours is reevaluating its ethics hotline practices and addressing the potential "material weaknesses" in its internal controls over financial reporting.

The delayed payments incident is not the first controversy Chemours has faced. The company has been mired in lawsuits and settlements over the contamination of public water systems with toxic "forever chemicals" (PFAS). In June 2023, Chemours settled claims for $592 million, and in September 2023, a Dutch court declared the company liable for pollution caused by its Teflon-producing plant in the Netherlands.

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