Argentina’s state-owned oil company, YPF [YPF:US], has agreed to pay almost USD300m to creditors of its now-bankrupt subsidiary, Maxus Energy Corporation [MXS:US], over a historic US environmental case, as reported by Reuters on April 7. The case relates to the contamination of the Passaic River in New Jersey, for which Maxus was sued in 2005. In 2018, the liquidation trust created to settle Maxus’ debts sued YPF and Repsol, which was YPF’s majority owner between 1999 and 2012, for USD14bn. The new conciliation agreement involves both YPF and Repsol [REP:SN] paying USD287.5m each to the Maxus Liquidation Trust, without admitting any responsibility.
The contamination of the Passaic River by Maxus Energy Corporation has been a long-standing environmental issue, and the case has been ongoing for years. The river was contaminated with various hazardous substances, including dioxin, PCBs, and mercury, which were released by Maxus Energy Corporation’s operations. The contamination affected wildlife and humans who used the river for recreational purposes, and the cleanup efforts have been costly and time-consuming. The settlement reached this week between YPF, Repsol, and the Maxus Liquidation Trust is a significant step towards resolving the case, although it does not fully compensate for the damage caused by the contamination.