* Tronox says Kerr-McGee defrauded creditors
* Kerr-McGee owner Anadarko says not responsible
(Adds Tronox comment from lawsuit)
NEW YORK May 12 Bankrupt chemicals maker
Tronox Inc TRXAQ.PK sued former parent Kerr-McGee, now part
of Anadarko Petroleum Corp (APC.N), on Tuesday, claiming that
the way it was spun off doomed it to fail.
The U.S. operations of Tronox, which makes titanium dioxide
pigment used in paint, plastics and paper, filed for Chapter 11
bankruptcy protection in January, less than three years after
being spun off from Kerr-McGee. A few months after the
spin-off, Kerr-McGee was acquired by Anadarko.
Tronox's lawsuit says that Kerr-McGee defrauded its
creditors through the spin-off.
When Tronox filed for bankruptcy in January it said in
court filings that prior to the spin-off, Kerr-McGee had
isolated most of its liabilities from its former discontinued
operations into Tronox -- its chemical business -- regardless
of their source.
As a result, Tronox has maintained that many legacy
liabilities it has shouldered do not relate to its core
titanium dioxide business.
"Overburdened with the legacy liabilities and debt,
stripped of essential cash, and grossly undercapitalized,
Tronox was doomed to fail," the lawsuit says.
"Despite valiant efforts to survive, including significant
personnel reductions, efforts to streamline its operations, and
reductions in retiree benefit programs, Tronox was left with no
choice but to file for bankruptcy protection," it adds.
Anadarko is not responsible for Tronox's financial
condition, said spokesman John Christiansen, as evidenced by
its initial public offering.
"The market demonstrates that Tronox was solvent and
adequately capitalized at the time of its IPO, as Tronox was
able to issue stock at approximately $14 per share, and it was
also able to enter into a credit facility and issue unsecured
bonds," Christiansen said.
Tronox attributed its deteriorating financial condition to
the downturn in the housing and construction markets as well as
other economic and operating challenges, Christiansen added.
"These difficult market conditions are unfortunate, but are
unrelated to Anadarko, Kerr-McGee and the IPO," he said.
"Tronox is not a unique case in these challenging economic
A copy of Tronox's lawsuit was not immediately available.
(Reporting by Martinne Geller and Robert MacMillan; editing by
Carol Bishopric, Gary Hill and Muralikumar Anantharaman)