California has turned up the heat on DuPont, accusing the company of restructuring itself specifically to keep money out of reach of the state and other creditors pursuing compensation for decades of PFAS contamination.
In an amended complaint filed Thursday in the AFFF multidistrict litigation before the US District Court for the District of South Carolina, state attorney-general Rob Bonta asked the court to freeze proceeds from asset sales tied to DuPont's pre-2017 businesses, the period before the company merged with Dow and later split into three separate entities: DuPont, Corteva and Chemours. Bonta's office wants those proceeds locked down until the underlying PFAS claims are resolved, and has called the case "first-of-its-kind litigation."
The filing builds on a suit Bonta brought in November 2022 against roughly 18 manufacturers, including 3M, over PFOA, PFOS and other PFAS chemicals long used in firefighting foam, non-stick cookware and stain-resistant fabrics. The Environmental Protection Agency has linked long-term exposure to kidney and liver problems, immune effects and reduced fertility.
The fraud allegation is new, though. Bonta claims DuPont's predecessor transferred the rights to PFAS-related insurance proceeds from Chemours, spun off in 2015, to DuPont and Corteva, created in the 2019 split, for a sum the state says was worth less than half the proceeds' estimated value. The complaint alleges the transactions were carried out "with the real intent to hinder, delay and defraud creditors or future creditors."
For insurers and risk managers tracking the case, that's the part worth watching. It goes straight to which entity in DuPont's corporate family will actually end up paying, and whether the insurance towers built to absorb PFAS liability can even be reached by claimants trying to collect.
DuPont's spin-off structure sits alongside other attempts by mass-tort defendants to use corporate engineering to cap their exposure. 3M's Aearo Technologies subsidiary tried the so-called "Texas Two-Step," spinning liabilities into a new entity and then pushing that entity into bankruptcy, only for an Indiana bankruptcy judge to dismiss the filing in 2023 on the grounds that Aearo was financially healthy and had no legitimate need for Chapter 11 protection.
Insurance Business has previously reported on comparisons being drawn between PFAS litigation and the asbestos crisisgiven the scale of exposure building across the market, and environmental coverage specialists have been flagging PFAS as a potential game-changer for liability underwriting for several years. DuPont has not yet responded publicly to the amended complaint.
PFAS litigation has already produced some of the largest settlements in US corporate history: 3M agreed to pay water providers roughly $10–12 billion in 2023, while DuPont, Chemours and Corteva reached a combined $1.19 billion settlement the same year over drinking-water contamination claims. Those figures give a sense of scale for what's at stake in a case now centred on who is actually liable to pay.
Legal commentary tracked by Insurance Business has already noted that fraudulent-conveyance claims tied to the Chemours spin-off were carved out of DuPont's existing settlement arrangements, meaning this dispute was always coming. The only question was timing. If Bonta succeeds in freezing the asset-sale proceeds, expect closer scrutiny of indemnification chains right across the PFAS defendant landscape, and renewed pressure on carriers to work out exactly where their exposure sits within these split-up corporate structures.
