YPF - YPF Repsol settle Passaic River contamination lawsuit for $575M

2023-04-10 10:43:52 ET

( NYSE: YPF ) +10% in Monday's trading after saying it agreed to pay nearly $300M to the creditors of one of its now-bankrupt subsidiaries in a U.S. environmental case, averting a $14B lawsuit.

The Argentine energy company and Spain's Repsol ( OTCQX:REPYF ) ( OTCQX:REPYY ), the former parent companies of Maxus Energy Corp., each agreed to pay half of a $575M settlement to end a longstanding bankruptcy court lawsuit over who should pay to clean up the contaminated Passaic River in New Jersey.

The dispute stemmed from Maxus' manufacturing site on the Passaic where its predecessor made herbicides and pesticides decades ago; Maxus shut down after filing for bankruptcy in 2016 and set up a liquidation trust to pursue claims for its unpaid environmental obligations, including litigation alleging YPF ( YPF ) and Repsol ( OTCQX:REPYF ) ( OTCQX:REPYY ) hollowed out the company to extract its value, while leaving its environmental debts unpaid.

YPF ( YPF ) bought Maxus in 1995 to gain a foothold in U.S. oil and gas markets, and Repsol ( OTCQX:REPYF ) ( OTCQX:REPYY ) acquired majority control of YPF in 1999.

YPF ( YPF ) shares are still a value with more upside ahead as valuation remains compelling while the chart appears bullish ahead of Q4 earnings, Mike Zaccardi writes in an analysis published on Seeking Alpha .

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