Nineteen states, Puerto Rico and the District of Columbia have asked a federal judge to halt Corteva Agriscience's plan to separate its seed and chemical businesses into two listed companies, arguing that the split is designed to shield assets from liability for so-called "forever chemicals".

The motion, filed in the US District Court for South Carolina and led by California, alleges that Corteva is shifting $39 billion in assets to Vylor Inc., the new seed company to be headquartered in Johnston, Iowa, "in exchange for a mere $3.56 billion cash distribution to New Corteva", the crop-protection company that would remain — leaving less to cover liabilities inherited from DuPont. Corteva became the parent of the chemicals manufacturer historically known as DuPont when the agricultural business was spun out of the DowDuPont merger in 2019. Its board approved the split on Monday, and the separation is due to take effect on 1 October.

The states want a temporary restraining order and a preliminary injunction. California Attorney General Rob Bonta said Corteva's chief executive and many board members "are fleeing Corteva — the company liable for these harms — for Vylor, which they say will be free of PFAS liability", and warned that without guardrails states, municipalities and taxpayers could be left with the cost of cleaning up historical DuPont operations. Los Angeles, San Francisco, San Diego, Denver and Philadelphia are among the cities joining the effort.

Corteva "categorically rejects the attempt" to block the separation and calls the underlying claims "speculative and unproven". It notes that the petitioning states hold no judgments against it and have no scheduled PFAS trials, and that in its seven-year history it "has never made, sold or traded PFOA or PFOS products".

"As we've stated from the beginning, our planned separation is an acknowledgement that our two businesses have different business models and will better deliver for farmers separately than they do together — meaning that the separation should result in stronger companies built for growth," said Corteva chief legal officer Jennifer Johnson. "Corteva neither has nor has demonstrated any intent to hinder, delay, or defraud our creditors."

Source: AGDAILY