A bankruptcy judge sent the former parent companies of Maxus Energy Corp. to trial over creditor allegations that they stripped the now-defunct subsidiary of assets and should pay as much as $14 billion for its obligation to clean up New Jersey’s Passaic River, the Wall Street Journal reported. Judge Christopher Sontchi of the U.S. Bankruptcy Court in Wilmington, Del., declined to grant pretrial judgment in litigation alleging Argentina’s YPF SA and Spain’s Repsol SA hollowed out Maxus to extract its value, while leaving its environmental debts unpaid when it filed for chapter 11 protection in 2016. A spokesperson for YPF declined to comment. The companies have denied the allegations. A Repsol representative said the judge’s decision “leaves open the question of Repsol’s liability and damages, if any, which are now the subject of a trial. Repsol intends to continue defending against the claims and believes it will be vindicated.” The lawsuit, filed on behalf of Maxus creditors after its bankruptcy, concerns a manufacturing site on the Passaic River where a corporate predecessor made herbicides and pesticides decades ago, including the defoliant Agent Orange. YPF, an Argentine oil giant, bought Maxus in 1995 to gain a foothold in U.S. oil-and-gas exploration and only later came to understand the extent of its environmental liabilities at the Newark, N.J., site, according to Wednesday’s ruling.
