The flag oil company, YPF, announced today an agreement with Maxus with which they will “will dismiss all actions filed once morest YPF and Repsol and will grant a release and total acquittal of the claims presented by said Trust for up to USD 14,000 million”. The information was detailed in a statement.
The conciliation agreement was reported by YPF to the National Securities Commission, the Argentine Stock Exchange and the Mercado Abierto Electrónico
This is an important resolution in the context of a 20-year litigation. “YPF and Repsol have reached a conciliation agreement under which the Maxus Liquidation Trust would waive the claims it has filed once morest YPF and Repsol in the Bankruptcy Court for the District of Delaware, as well as all current and future claims it may have once morest YPF and Repsol”. The measure is still subject to judicial approval.
According to the statement, YPF and Repsol agree to pay USD 287.5 million each, without either of the two companies “admit any responsibility” regarding the cause. The amount that YPF will have to pay is close to 2% of what was originally claimed in court.
Likewise, YPF and Repsol have signed a transaction agreement with Occidental Chemical Corporation and some of its affiliates, “under which Occidental has agreed to waive all claims it may have once morest YPF or Repsol, in relation to the Maxus entities, the Passaic River and other areas subject to environmental remediation”.
In the announcement, the state oil company highlighted that the company also sealed agreements with several government entities, such as the US Environmental Protection Agency, and the governments of the states of Ohio and Wisconsin, in which they agree not to present legal claims.
“If the conditions are met, Settlements will end years-long litigation, reaching a settlement that is fair and reasonable for all partiess, and that will allow YPF to continue focusing its efforts on the generation of value and employment, deepen the growth of its production and focus its efforts on the necessary investments to strengthen and diversify the Argentine energy matrix”, emphasized spokesmen for the oil company.
What is the origin of the Maxus case, for which YPF reached an agreement
In 1995, under the management of José Estenssoro, the privatized YPF deployed a strategy of international expansion and acquired Maxus, a North American oil and gas company. This firm was the kickoff of a business strategy that “In the light of the time, it was presented as attractive for the company”.
In 1986, Maxus had sold its chemical business to Occidental Chemical Corporation and had agreed to indemnify the latter for environmental liabilities arising from its operations.
Subsequently, in 2005 the State of New Jersey sued Occidental and Maxus -later adding YPF and Repsol to the lawsuit- due to chemical waste contamination of the Passaic Riverlocated 10 kilometers from New York City.
Consequently, Maxus honored his obligations until On June 17, 2016, he made the decision to file for bankruptcy and his bankruptcy was later declared.. In June 2018, the Maxus Liquidation Trust had sued YPF and Repsol and certain subsidiaries, for an amount of up to 14,000 million dollars in the Delaware courts, alleging that “Maxus intended to hinder, delay, or defraud his creditors.”
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