Maxus Energy Corp. filed for bankruptcy protection Friday after reaching a deal with its corporate parent, YPF SA, on the terms of a settlement tied to liabilities for the cleanup of New Jersey’s contaminated Passaic River.
The deal calls for YPF to provide Maxus, which filed for chapter 11 protection in U.S. Bankruptcy Court in Wilmington, Del., along with four other affiliates including its Tierra Solutions unit, with $130 million. In return, Maxus will drop any “alter ego” claims it may have against its parent for cleaning up the river.
YPF, which is Argentina’s state-run oil company, bought Maxus Energy Corp. in 1995. A New Jersey state court ruled five years ago that Maxus and Tierra were responsible for dumping of dioxin, a highly toxic chemical and suspected carcinogen, into the river in the 1950s and 1960s.
The bankruptcy filing comes days before Occidental Petroleum Corp.’s chemical subsidiary, known as OxyChem, was slated to head to court over litigation seeking to put YPF on the hook for Maxus’s environmental obligations. OxyChem purchased part of Maxus’s business in 1986.