8-KOther EventsExhibits & Filings

EIDP, Inc. 8-K Report, Corporate Update (Feb 13, 2017)

Filed February 13, 2017For Securities:CTA-PBCTA-PA

Summary

E. I. du Pont de Nemours and Company (DuPont) filed an 8-K on February 13, 2017, to report the settlement of approximately 3,550 personal injury lawsuits related to perfluorooctanoic acid (PFOA) exposure. The litigation, consolidated in a multi-district litigation (MDL) in Ohio, alleged harm from PFOA manufactured or used at the Washington Works plant, which was previously operated by DuPont's performance chemicals segment and is now owned by The Chemours Company. DuPont and Chemours have reached an agreement in principle for a global settlement totaling $670.7 million, with each company responsible for half of the payment. This settlement is crucial for resolving significant legal and financial liabilities stemming from historical operations.

Key Highlights

  • 1DuPont has entered into an agreement in principle to globally settle approximately 3,550 personal injury lawsuits concerning PFOA exposure.
  • 2The total settlement amount is $670.7 million, with DuPont and Chemours each contributing 50% ($335.35 million).
  • 3DuPont's portion of the settlement payment will not be subject to indemnification or reimbursement by Chemours.
  • 4The settlement provides a complete release of all claims from the settling plaintiffs for both DuPont and Chemours.
  • 5The settlement is not subject to court approval but requires the drafting of a master settlement agreement and includes a walk-away right for DuPont under certain conditions.
  • 6DuPont and Chemours have agreed to a limited, five-year sharing of potential future PFOA liabilities, with specific payment caps for each company and DuPont covering excess amounts up to $25 million annually.
  • 7Chemours has waived certain defenses related to PFOA liabilities under the Separation Agreement, including those concerning punitive damages, fines, or penalties, but retains defenses regarding the scope of coverage.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce E. I. du Pont de Nemours and Company's (DuPont) agreement in principle to a global settlement of approximately 3,550 personal injury lawsuits related to perfluorooctanoic acid (PFOA) exposure. It also details the financial responsibilities of DuPont and The Chemours Company (Chemours) in this settlement and a limited agreement for sharing future PFOA liabilities.

The total settlement amount is $670.7 million. This amount is to be split equally between DuPont and Chemours, with each company responsible for paying $335.35 million. Importantly, DuPont's payment is not subject to indemnification or reimbursement by Chemours.

This settlement resolves all filed and unfiled personal injury cases and claims that are part of the plaintiffs' counsel's claim inventory within the multi-district litigation (MDL). It also includes cases that have already gone to jury verdict. However, the filing also mentions a limited sharing of potential *future* PFOA liabilities for a period of five years, indicating that some residual future liability considerations remain, though on a capped and shared basis.

Following the settlement's effectiveness, DuPont and Chemours have agreed to a limited sharing of potential future PFOA liabilities for five years. During this period, Chemours will cover liabilities up to $25 million annually. If this amount is exceeded, DuPont will pay the excess up to another $25 million (not subject to indemnification by Chemours), with Chemours covering any further excess. After five years, this limited sharing agreement expires, and Chemours' existing indemnification obligations under the separation agreement will resume as unchanged.