Chemours must face shareholder lawsuit over 'forever chemicals'

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REUTERS/Yuri Gripas

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  • Greenlights claim that company understated cleanup costs of more than $2 billion

(Reuters) - A U.S. judge on Thursday ruled that Chemours Co must face shareholders' claim that it understated the maximum costs associated with cleaning up certain long-lived chemicals after the company was spun off from E.I. du Pont de Nemours and Co.

U.S. District Judge Colm Connolly of Delaware said that investors had plausibly alleged Chemours falsely stated that its maximum liability from perfluoroalkyl and polyfluoroalkyl substances (PFAS) would be "up to" $780 million in 2018 and 2019. The investors claim that a presentation to Chemours' board and executives had put the liability at more than $2 billion.

The judge dismissed other claims over Chemours' statements.

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A spokesperson for Chemours said on Thursday that the company is pleased that the ruling "significantly" narrowed the case.

"Chemours and its Board have acted appropriately, in good faith, and in compliance with law at all times," the spokesperson said.

An attorney for the investors declined to comment.

The company had said in its motion to dismiss that the presentation did not concern environmental remediation costs but was part of a corporate responsibility initiative. Connolly said it was too early in the case to consider that evidence.

PFAS, a family of man-made chemical compounds, have been used for decades to make nonstick coatings such as Teflon and have been associated with serious health risks.

Nicknamed "forever chemicals" because they don't break down easily, PFAS have sparked numerous lawsuits against their manufacturers.

The case is In re The Chemours Company Securities Litigation, No. 19-CV-01911, U.S. District Court, District of Delaware.

For the company: Joel Friedlander, Jeffrey Gorris and Christopher Foulds of Friedlander & Gorris

For investors: Maya Saxena, Joseph White III, Lester Hooker of Saxena White, Bruce E. Jameson of Prickett Jones & Elliott

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Jody Godoy reports on banking and securities law. Reach her at jody.godoy@thomsonreuters.com