16 States File DuPont Corteva Vylor Fraudulent Transfer Lawsuit

• A bipartisan coalition of sixteen states and sovereign governments has sued DuPont, Corteva, and Vylor over an alleged fraudulent asset transfer.
• The lawsuit claims DuPont transferred its valuable Pioneer seeds business to Vylor, leaving behind massive PFAS environmental liabilities.
• The transfer, dated October 1, 2026, allegedly moved approximately 75% of DuPont's value to Vylor, which was intentionally structured to avoid PFAS responsibilities.
• Plaintiffs seek a temporary restraining order to freeze assets, preventing DuPont and Corteva from using funds for dividends/buybacks and Vylor from selling its new assets.
• The action aims to protect creditor rights and ensure DuPont addresses contamination from PFAS, chemicals linked to severe health issues and environmental damage.

This alleged maneuver has left DuPont with substantially fewer assets available to satisfy the claims of states and other creditors.

A bipartisan coalition comprising sixteen states and sovereign governments has initiated a legal action against EIDP, historically known as DuPont, its parent company Corteva, and a newly established entity named Vylor. The lawsuit, which includes Vermont Attorney General Charity Clark, targets what the plaintiffs describe as a coordinated effort to fraudulently transfer DuPont's most valuable business assets to Vylor, thereby allegedly shielding them from significant environmental liabilities, particularly those associated with PFAS chemicals.

The core of the complaint centers on the transfer of DuPont and Corteva's Pioneer seeds business, a substantial corn and soybean operation, to Vylor on October 1, 2026. This transaction, according to the coalition, resulted in Vylor acquiring approximately three-quarters of the value previously held by DuPont and Corteva. However, the deal was intentionally structured by Corteva to ensure Vylor assumed no responsibility for the extensive PFAS liabilities that DuPont currently faces. This alleged maneuver has left DuPont with substantially fewer assets available to satisfy the claims of states and other creditors.

The coalition, led by the State of Indiana and joined by Vermont, Alaska, Florida, Maine, Maryland, Massachusetts, New Hampshire, New Mexico, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Washington, and the Government of Guam, is seeking immediate judicial intervention. They have petitioned a Marion County, Indiana, court for a temporary restraining order. This proposed order aims to freeze the assets involved, specifically preventing DuPont and Corteva from utilizing their remaining funds for dividends and stock buybacks, and prohibiting Vylor from selling or pledging the seeds assets it recently acquired. This DuPont Corteva Vylor fraudulent transfer lawsuit underscores a growing trend of states challenging corporate restructurings perceived as attempts to evade environmental responsibilities.

The liabilities at the heart of this multistate PFAS liability lawsuit stem from per- and polyfluoroalkyl substances, commonly referred to as PFAS or "forever chemicals." These synthetic compounds have been extensively used globally since the 1950s in various industrial and consumer products due to their resistance to heat and ability to repel oil, stains, grease, and water. Among these, PFOA is highlighted as extremely toxic and unsafe at any detectable level.

PFAS chemicals are notoriously persistent, meaning they do not readily break down in the environment. This characteristic leads to widespread contamination of drinking water, groundwater, and soil, with remediation efforts proving to be both complex and costly. Scientific studies have linked exposure to PFAS to a range of adverse health effects, including various forms of cancer, infertility, thyroid disease, and developmental harm in children.

DuPont's alleged knowledge regarding these dangers is a critical component of the broader PFAS forever chemicals litigation. Internal company documents reportedly demonstrate that for decades, DuPont knowingly concealed its increasing awareness of the health and environmental risks posed by these chemicals. This history of alleged concealment forms the backdrop for numerous legal challenges, including two cases filed by the Vermont AG against DuPont and other entities in 2019, which are currently pending. One of these cases, concerning PFAS contamination from aqueous film-forming foam (AFFF), is part of a large multidistrict litigation in federal court in South Carolina, while the other, addressing contamination from consumer and industrial products, has completed discovery in Vermont federal district court.

The legal action brought by the coalition asserts that the EIDP Pioneer seeds transfer was deliberately orchestrated to interfere with the rights of creditors to collect on existing and anticipated liabilities. By transferring a significant portion of its value to Vylor without a corresponding transfer of environmental obligations, DuPont has, in the states' view, diminished its capacity to address the contamination it caused. This situation raises critical questions about creditor rights environmental liability in the context of corporate reorganizations.

The lawsuit's central claim is that the transaction constitutes a fraudulent transfer, designed to insulate assets from legitimate claims. Such challenges are common when a company with substantial liabilities attempts to move assets to a new entity, especially if the new entity is not burdened with those liabilities. The requested temporary restraining order is a crucial step to prevent further dissipation of assets that could otherwise be used to satisfy environmental remediation costs and other damages.

This case sets a significant precedent for how state attorneys general may scrutinize and challenge corporate restructurings, particularly when companies with substantial environmental liabilities, such as those related to PFAS, transfer assets to new entities. It highlights the legal risks corporations face if such transfers are perceived as attempts to evade existing or anticipated obligations, potentially leading to claims of fraudulent transfer and asset freezes.

Lawyers advising corporations with significant environmental liabilities, particularly PFAS-related, should closely monitor this multistate action. It sets a precedent for how state attorneys general may challenge corporate restructurings (like asset transfers to new entities) if they appear designed to evade existing or anticipated liabilities, potentially exposing companies to fraudulent transfer claims and asset freezes.

Source: Original reporting via Attorney General Charity Clark's office