California Atty. Gen. Rob Bonta filed a complaint Thursday alleging that a cohort of the companies that make “forever chemicals” partook in a massive corporate shell game to defraud the state and others.
In an amendment to a 2022 lawsuit filed by Bonta against the makers of these chemicals, the state now alleges that several DuPont spin-off companies — New DuPont, Corteva, Chemours and Qnity Electronics — worked together to create a “fall guy” company designed to take the financial hit stemming from several multibillion-dollar pollution lawsuits while keeping the companies’ most valuable assets out of reach.
“The DuPont Defendants cannot game the system by illegally moving assets out of reach, dodging liabilities for the harm they have caused, and calling it restructuring,” Bonta said in a statement. “I look forward to ensuring that these companies are held accountable for PFAS pollution and that their assets cannot be hidden behind corporate walls while their responsibilities are left behind.”
The Second Amended Complaint, as the new amendment is called, was filed in the United States District Court for the District of South Carolina on Thursday.
DuPont did not immediately respond to a request for a comment.
In 2022, Bonta sued 20 chemical manufacturers, including 3M and DuPont, alleging the companies knew about the dangers of perfluoroalkyl and polyfluoroalkyl substances — or PFAS — when they made and/or sold products containing them. The suit also claims the companies failed to warn the public about the environmental and health risks of those chemicals and in many cases concealed the risks.
That lawsuit remains active and ongoing.
PFAS chemicals are found in a variety of consumer items including food packaging and cookware and are linked to cancer and other illnesses and health risks, including developmental defects, infertility and reduced bone density in children.
They are resistant to environmental degradation, according to the Centers for Disease Control and Prevention, the Environmental Protection Agency and hundreds of scientific studies. They have also been found in the bloodstreams of 98% of people tested, as well as in wildlife, fish, water — including rivers, lakes and nearshore waters — and soil.
Data from the State Water Resources Control Board show PFAS chemicals are in drinking, ground and surface waters in the state. They’ve been detected in at least 146 public water systems serving 16 million Californians, as well as in aquifers that provide millions of Californians with water through unregulated domestic wells.
According to a press release from Bonta’s office, the fraudulent DuPont scheme worked like this: By 2013, the original, “Old” DuPont company knew it faced billions of dollars in environmental clean up costs and legal damages due to its PFAS products. To protect its assets and make itself appealing for a merger with industry giant Dow Chemical, the Old Dupont company initiated a multi-phase restructuring plan, which it called “Project Beta.”
Bonta referred to the original DuPont company as “Old Dupont” and a newer version as “New DuPont” in his filing.
It started with the creation of a company called Chemours, which the Old DuPont company spun-off in 2015. The Old DuPont company transferred its PFAS business to this new company and extracted almost $7 billion in cash, stocks and notes from the new company. The new company was also forced to assume all of Old DuPont’s historical PFAS liabilities and sign an agreement to indemnify Old DuPont against them.
Bonta claims this was a sham transaction, leaving Chemours holding the liability bag with no way to pay the environmental debts it would incur should the courts come calling.
Old DuPont merged with Dow Chemical in 2015, and according to Bonta’s claim, the new company, DowDuPont, was again structured in a way that would protect the new company from any remaining PFAS liabilities.
In 2019, the company went through another reshuffling. A “New” Dow was created, which took the materials science assets, as well as a company called Corteva, which took the company’s agricultural businesses. A New DuPont company was also formed.
During this same year, Chemours sued the other DuPont companies, claiming it had been handed a financial time bomb because of the PFAS liability it had been left with. The company alleged the 2015 deal was a sham that set them up for bankruptcy.
In 2021, the companies sat down to resolve the lawsuit. Chemours agreed to drop the lawsuit and waive its right to sue. In exchange, Corteva and New DuPont agreed to split the costs of future PFAS liabilities with Chemours 50/50 — but only up to $4 billion.
Bonta alleges that $4 billion was a gross underestimate of the potential legal damages they were likely to face. The result of the agreement would have capped Corteva and New DuPont’s liability to $2 billion and saddled Chemours with any and everything else — a number he claims is likely to far exceed $2 billion.
Chemours also had insurance policies that would have helped pay for the PFAS lawsuits. However, Bonta alleges that Chemours sold 100% of those insurance payouts back to its sister companies in 2025 for a lump sum of cash that was worth less than half of what the insurance was actually valued at.
By transferring away its best assets (the insurance) while keeping the massive debt, Chemours was hollowed out so it can’t pay its potential creditors, which includes the state of California.
To further protect their wealth, New DuPont is accused of continuing to chop up its remaining valuable businesses and separating them. For example, the court filing claims they took their profitable electronics business and turned it into a totally separate, independent company called Qnity.
Bonta claims these restructuring moves violate the Uniform Fraudulent Transfer Act and the Uniform Voidable Transactions Act. He is asking the court to stop the companies from selling, spending, or moving any more assets or profits that belonged to the original, or Old DuPont company in order to insure that California gets its payout if the chemical companies lose the lawsuit.