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Weil Defeats Billion Dollar Alter Ego Claim and Scores $65 Million for Repsol on Counterclaim

On October 19, 2017, Weil achieved the latest in a series of victories for Spanish energy company Repsol, S.A. in a major litigation that involves allegedly billions of dollars of liabilities in connection with pollution of the Passaic River in New Jersey. The Superior Court of New Jersey adopted the recommendation of a Special Master and granted Respol’s motion for summary judgment to recover from co-defendant Occidental Chemical Corp. (OCC) $65 million in clean-up costs Repsol had previously paid in settling with the New Jersey Department of Environmental Protection (NJDEP).

The litigation was originally commenced by the NJDEP against a number of energy companies, including OCC, Maxus Energy Corp. and its parent YPF, S.A., and Repsol. OCC raised cross-claims against Maxus, YPF, and Repsol, alleging that the parties were alter egos and should be held liable for OCC’s costs related to the billion-dollar clean-up. Repsol counterclaimed that OCC was liable in contribution to Repsol for the $65 million Repsol had paid to settle with the NJDEP. Early last year, on the eve of trial, the Weil team secured summary judgment on behalf of Repsol on OCC’s alter ego theory of liability, eliminating all of OCC’s claims against Repsol. The Weil team continued to pursue Repsol’s counterclaim.

In June 2016, the Special Master issued a recommendation granting Repsol’s motion for summary judgment on its counterclaim under the New Jersey Spill Act against OCC for recovery of the $65 million Repsol earlier paid in clean-up costs in its settlement with the NJDEP. As a result of the Superior Court’s October 2017 decision, OCC now is required to pay Repsol $65 million on its counterclaim, bringing nearly a decade of litigation to a successful close.

The Weil team was led by Complex Commercial Litigation Co-Head Edward Soto, Litigation partners Diane Sullivan and Allison Brown, and retired partner David Hird, and included litigation counsel Edward McCarthy and associates Lara Bach, Corey Berman, Carolyn Davis, Lorell Guerrero, Alexis Kellert, and Pravin Patel. Business Finance & Restructuring partner Robert Lemons and associates Scott Bowling and Patrick Steel also made major contributions, as did former partner Bruce Meyer.

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