US states filed fraud lawsuit over Corteva's Vylor spinoff

By Reuters News

By Dietrich Knauth

NEW YORK, Oct 1 (Reuters) - A group of US states sued Corteva CTVA.N and Vylor VYLR.N on Thursday, alleging Corteva's spinoff of its seed business to Vylor was a fraudulent attempt to avoid tens of billions in legacy liabilities related to "forever chemicals" polluting the environment.

The lawsuit, filed in Indiana state court by 15 US states and the territory of Guam, alleges that Vylor received the "crown jewels" of Corteva's business without assuming its liabilities for perfluoroalkyl and polyfluoroalkyl substances (PFAS). Corteva and Vylor are corporate successors to DuPont, which has been named in thousands of lawsuits alleging the company's chemicals have polluted the environment and exposed millions of Americans to potential health risks.

Corteva completed the spinoff of its seed and genetics business into a separate publicly traded company on Thursday.

Corteva was formed during the 2015 merger of Dow Chemical Company and DuPont, taking on the combined companies' agriculture business and becoming the corporate parent of the old DuPont companies, according to the complaint.

At the time Corteva contractually assumed DuPont's PFAS liabilities, but the new Vylor transaction attempts to spin off the profitable seed business without taking on any of the old company's PFAS debts. The states allege that the spinoff is an attempt to defraud PFAS creditors by placing assets out of reach of their lawsuits against former DuPont companies.

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