March 24, 2010 / 10:02 PM / 8 years ago

Chemtura hits back at $9 billion claim over toxins

* Chemtura faces $9 billion claim from think tank

* Company says group is not a creditor

By John Parry

NEW YORK, March 24 (Reuters) - Bankrupt U.S. chemicals maker Chemtura Corp CEMJQ.PK and its creditors are fighting claims from a California public interest group that says it is owed $9 billion to compensate the public for alleged injuries from toxic chemicals.

In a court document filed earlier this week, the company said the group, the Council for Education and Research on Toxics (CERT), previously known for taking legal action against Burger King Holdings Inc (BKC.N) and McDonald’s Corp (MCD.N) for the contents of french fries, is not a creditor.

The CERT originally filed its claims in October.

Chemtura filed for bankruptcy protection last year, listing assets in excess of $3 billion.

CERT filed claims on Oct. 30, 2009, seeking $9 billion in total for the “public interest” due to injuries allegedly caused by previously produced chemicals.

Last month, Chemtura’s Creditors’ Committee filed an objection to the claims, which the company has now joined, on the grounds that CERT is not a creditor and does not have a basis to make its claims, they say.

“The claims should be disallowed in full because CERT is not a creditor as defined by the Bankruptcy Code,” Chemtura said in court documents filed on Monday.

“CERT provides no evidence to substantiate a causal link between the debtors’ prior production and/or distribution of chemicals and the alleged toxic injuries to animals and humans,” the company added.

The CERT, which describes itself as a public benefit corporation whose charitable purposes include education and research on toxic substances, previously sued the fast food restaurants in 2002, claiming it has exposed consumers to high levels of a suspected toxic chemical in their french fries. In 2007, after further litigation, the chains agreed to post warnings about the chemical at restaurants in California and pay civil penalties as part of a settlement.

There is a hearing on the Chemtura case scheduled for April 7, court documents showed.

The case is In re: Chemtura Corp, U.S. Bankruptcy Court, Southern District of New York, No. 09-11233. (Reporting by John Parry; additional reporting by Sakthi Prasad in Bangalore; editing by Andre Grenon)

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