Chemtura Environment Dispute Goes To Federal Court

A U.S. judge has ruled that bankrupt specialty chemicals maker Chemtura can take its case to avoid paying certain environmental claims to the U.S. government to federal court.

In a decision on Friday, U.S. District Judge Richard Berman, said Chemtura could move its proceeding from bankruptcy court to District Court, because it was a broader issue.

In January, the U.S. government sued Chemtura on behalf of federal and state environmental agencies, about whether Chemtura could be released from certain environmental obligations in its bankruptcy case. Chemtura is seeking to avoid paying certain claims by the government when it exits bankruptcy because such legal claims can often be left behind in bankruptcy.

The company's operating history, which goes back about 100 years, has left it with legacy environmental liabilities and obligations at manufacturing sites that are currently not even owned by the company, it has argued in court papers. "

Resolution of the disputed issues requires considerably more than an analysis and application of bankruptcy law," Judge Berman wrote in his decision.

Chemtura, hit by reduced demand filed for bankruptcy protection last June and is hoping to exit bankruptcy protection this summer.