Item 1.01. Entry into a Material Definitive Agreement.
The information set forth under Item 2.03 below is hereby incorporated by
reference into this Item 1.01.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On January 22, 2021, The Chemours Company ("Chemours"), DuPont de Nemours, Inc.
("DuPont"), Corteva Inc. ("Corteva"), and E. I. du Pont de Nemours and Company
("EID"), a subsidiary of Corteva, entered into a binding memorandum of
understanding (the "MOU") reflecting the parties' agreement to share potential
future legacy liabilities relating to per- and polyfluoroalkyl substances
arising out of pre-July 1, 2015 conduct ("PFAS") (i.e., "indemnifiable losses,"
as defined in the separation agreement, dated as of June 26, 2015, as amended,
between EID and Chemours (the "Separation Agreement")) until the earlier to
occur of (i) December 31, 2040, (ii) the day on which the aggregate amount of
Qualified Spend (as defined in the MOU) is equal to $4 billion or (iii) a
termination in accordance with the terms of the MOU. The parties have agreed
that, during the term of the sharing arrangement, Chemours will bear half of the
cost of such future potential legacy PFAS liabilities, and DuPont and Corteva
will collectively bear the other half of the cost of such future potential
legacy PFAS liabilities. After the term of this arrangement, Chemours'
indemnification obligations under the Separation Agreement would continue
unchanged, subject in each case to certain exceptions set out in the MOU.
Pursuant to the terms of the MOU, the parties have agreed to release certain
claims regarding Chemours' Delaware lawsuit and pending confidential arbitration
(concerning the indemnification of specified liabilities that EID assigned to
Chemours in its spin-off), including that Chemours has released any claim set
forth in the complaint filed in the Delaware lawsuit, any other similar claims
arising out of or resulting from the facts recited by Chemours in the complaint
or the process and manner in which EID structured or conducted the spin-off, and
any other claims that challenge the spin-off or the assumption of Chemours
Liabilities (as defined in the Separation Agreement) by Chemours and the
allocation thereof, subject in each case to certain exceptions set out in the
MOU. The parties have further agreed not to bring any future, additional claims
regarding the Separation Agreement or the MOU outside of arbitration. In
connection with entering into the MOU, the parties will jointly terminate the
pending arbitration. The parties will cooperate in good faith to enter into
additional agreements reflecting the terms set forth in the MOU prior to
February 28, 2021.
In order to support and manage any potential future PFAS liabilities, the
parties have also agreed to establish an escrow account. The MOU provides that
(1) no later than each of September 30, 2021 and September 30, 2022, Chemours
shall deposit $100 million into an escrow account and DuPont and Corteva shall
together deposit $100 million in the aggregate into an escrow account and (2) no
later than September 30 of each subsequent year through and including 2028,
Chemours shall deposit $50 million into an escrow account and DuPont and Corteva
shall together deposit $50 million in the aggregate into an escrow
account. Subject to the terms and conditions set forth in the MOU, each party
may be permitted to defer funding in any year (excluding 2021). Additionally, if
on December 31, 2028, the balance of the escrow account (including interest) is
less than $700 million, Chemours will make 50% of the deposits and DuPont and
Corteva together will make 50% of the deposits necessary to restore the balance
of the escrow account to $700 million. Such payments will be made in a series of
consecutive annual equal installments commencing on September 30, 2029 pursuant
to the escrow account replenishment terms as set forth in the MOU.
The foregoing description of the MOU does not purport to be complete and is
qualified in its entirety by reference to the full text of the MOU and the
exhibits thereto, a copy of which is attached hereto as Exhibit 10.1 and is
incorporated herein by reference.
Item 8.01. Other Events.
Settlement of PFOA Litigation
Since February 2017, approximately 96 personal injury cases have been filed in
federal courts in Ohio and West Virginia alleging personal injury from exposure
to perfluorooctanoic acid and its salts, including the ammonium salt ("PFOA"),
in drinking water as a result of the historical manufacture or use of PFOA. The
personal injury cases were consolidated in multi-district litigation in Ohio
federal court (the "MDL"). On January 21, 2021, EID and Chemours entered into
settlement agreements with counsels representing the MDL plaintiffs providing
for a settlement of all cases and claims in the MDL, under which those cases and
claims of settling plaintiffs will be resolved for approximately $83 million,
with Chemours contributing approximately $29 million and DuPont and Corteva each
contributing approximately $27 million. The settlement was entered into solely
by way of compromise and settlement and is not in any way an admission of
liability or fault by Chemours, Corteva, EID or DuPont. The matter Travis and
Julie Abbott v. E. I. du Pont de Nemours and Company is not included in the
settlement and is presently pending motions for new trial.
Chemours has accrued approximately $29 million associated with this matter at
December 31, 2020.
Press Release
On January 22, 2021, Chemours, DuPont and Corteva issued a joint press release
announcing the matters described in this Current Report on Form 8-K. A copy of
the press release is attached hereto as Exhibit 99.1 and is incorporated by
reference herein.
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Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements, within the
meaning of the safe harbor provisions of the U.S. Private Securities Litigation
Reform Act of 1995, which involve risks and uncertainties. Forward-looking
statements provide current expectations of future events based on certain
assumptions and include any statement that does not directly relate to a
historical or current fact. The words "believe," "expect," "will," "anticipate,"
"plan," "estimate," "target," "project" and similar expressions, among others,
generally identify "forward-looking statements," which speak only as of the date
such statements were made. Forward-looking statements are based on certain
assumptions and expectations of future events that may not be accurate or
realized. These statements are not guarantees of future
performance. Forward-looking statements also involve risks and uncertainties
that are beyond Chemours' control. Additionally, there may be other risks and
uncertainties that Chemours is unable to identify at this time or that Chemours
does not currently expect to have a material impact on its business. Factors
that could cause or contribute to these differences include, but are not limited
to: the outcome of any pending or future litigation related to PFAS or PFOA
including personal injury claims and natural resource damages claims; the extent
and cost of ongoing remediation obligations and potential future remediation
obligations; changes in laws and regulations applicable to PFAS chemicals; the
performance by each of DuPont and Corteva of its obligations under the sharing
agreement; the terms of any final agreement between Chemours, DuPont and Corteva
relating to the sharing agreement; and the risks, uncertainties and other
factors discussed in our filings with the U.S. Securities and Exchange
Commission, including in our Quarterly Reports on Form 10-Q for the quarters
ended March 31, 2020, June 30, 2020 and September 30, 2020 and our Annual Report
on Form 10-K for the year ended December 31, 2019. Chemours assumes no
obligation to revise or update any forward-looking statement for any reason,
except as required by law.
Item 9.01.Financial Statements and Exhibits.
(d)Exhibits.
Exhibit No. Description
10.1 Memorandum of Understanding, dated January 22, 2021, by and among
The Chemours Company, Corteva, Inc., E. I. du Pont de Nemours and
Company and DuPont de Nemours, Inc. (f/k/a DowDuPont Inc.).
99.1 Press Release, dated January 22, 2021.
104 The cover page from this Current Report on Form 8-K, formatted in
Inline XBRL.
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