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Invista Sues DuPont for $800 M; DuPont Calls Allegations 'Misguided'

April 8, 2008

Wichita, Kan.-based textile and chemical maker Invista said March 26 it had filed suit against chemical manufacturer and health care giant E.I. Dupont De Nemours & Co., claiming plants Invista acquired from DuPont in 2004 had numerous safety and environmental violations. The lawsuit, filed in the U.S. District Court for the Southern District of New York, seeks compensatory damages of at least $800 million plus punitive damages.

The lawsuit stems from a $4 billion deal four years ago in which Invista assumed control of 14 DuPont plants worldwide. Invista claims that within weeks of closing the deal, it discovered serious safety and health violations. DuPont rejected the allegations, saying they were "grossly exaggerated and misguided."

Invista spokeswoman Mary Beth Jarvis said the April 30, 2004 purchase and sale agreement specified that DuPont is responsible for costs associated with correcting noncompliance that existed while it owned the 14 sites mentioned in the lawsuit. She added that the lawsuit describes more than three years of DuPont consistently refusing to fulfill these obligations.

"DuPont failed to comply with environmental and health and safety laws and regulations, meet permit obligations, and take other actions to protect its employees, the community, and the environment prior to selling these assets," Jarvis said. "What Invista has spent since acquiring the facilities and what remains to be spent to remedy DuPont's noncompliance far exceeds the 'tens of millions of dollars' DuPont claims to have spent on the assets prior to the sale."

Jarvis added that, as outlined in the lawsuit, Invista has spent approximately $140 million to uncover, report, and correct DuPont's safety and environmental violations. Additional capital expenditures currently estimated in the range of $300 million to $450 million will be required in a nearly final agreement between the company and U.S. federal and state authorities that will require the installation of pollution control systems at the former DuPont facilities in the United States, she said. These required projects will also increase future annual operating costs at the facilities, and those increased costs are included in the claim. Former DuPont plants outside the United States also require additional capital expenditures to correct DuPont's noncompliance, she said. The lawsuit involves 14 plants in five countries--Victoria, LaPorte and Orange, Texas; Camden, S.C.; Seaford, Del.; Chattanooga, Tenn.; Waynesboro, Va.; Maitland and Kingston, Ontario, Canada; Wilton, Gloucester, and Maydown, U.K; Dordrecht, Netherlands; and Paulinia, Brazil.

In a statement, DuPont described the suit as "opportunistic" and said Invista's allegations "are based purely on a contract dispute--plain and simple. Not a single person was injured or placed at unreasonable risk in connection with any of Invista's indemnification claims."