Replies to post #19 on Chemours Company (CC)

[Enterprising Investor]

Chemours: DuPont Spinoff ‘Was Purposely Designed for Bankruptcy,’ Citron Says (6/02/16)

By Ben Levisohn

Shares of Chemours (CC) have tumbled more than 7% today after Citron Research issued a report calling the DuPont (DD) spinoff “a bankruptcy waiting to happen,” one that was “purposely designed for bankruptcy.” From the report:

It is obvious to Citron, and many other journalistic outlets, that the whole purpose of Chemours existence was so DuPont could rid itself of the black hole of environmental liabilities that will drag down the company for years if not decades to come.

No one has an exact dollar figure yet on the extent of the liabilities of this debacle. While Chemours only accounts for $20 million of overhang on its balance sheet, most Wall Street analysts estimate the liability to fall more inline with the $500 million figure.

But we always hear the value $5 billion being thrown around by social activists like the “Keep Your Promises DuPont” campaign, which has pegged environmental costs just for Parkersburg WV at $1 billion. After speaking in depth with community activists, Citron believes that even $5 billion may be a low number for
Medical Monitoring
Cleanup
Compensatory damages to victims
Punitive damages to victims
Legal Fees

These damages will be not limited to West Virginia but rather they will span across 171 sites in the U.S, plus worldwide locations. What we are witnessing in the Mid-Ohio Valley is just the tip of the iceberg…

DuPont has agreed to merge with Dow Chemical (DOW). Anticipated completion is this summer. The subsequent plan is for the new entity to be spun off into three separate companies within 18 months.

This merger plan threatens to create a Death Star — the ultimate superweapon that cannot be penetrated. This means unlike its predecessor bankruptcies in which the attorneys could go after a sole surviving party, Chemours inevitable bankruptcy won’t have a single responsible party to sue for fraudulent conveyance of Chemours.

You can find the entire Citron report on Chemours here.

http://www.citronresearch.com/chemours-is-a-bankruptcy-waiting-to-happen-chemours-was-purposely-designed-for-bankruptcy/

Shares of Chemours have dropped 7.4% to $8.15 at 2:49 p.m. today, while DuPont has gained 1.8% to $67.61, and Dow Chemical has risen 1.1% to $52.12.

http://blogs.barrons.com/stockstowatchtoday/2016/06/02/chemours-dupont-spinoff-was-purposely-designed-for-bankruptcy-citron-says/