DoingItLocal

Bankruptcy Attempts End-Run Around Supreme Court Decision in Purdue Pharma Bankruptcy That Struck Down Third-Party Releases

(Hartford, CT) – Attorney General William Tong today objected to a proposed bankruptcy deal for firefighting foam manufacturer Kidde-Fenwal, Inc. that seeks to unlawfully release its parent company Carrier Global Corporation from liability for PFAS forever chemical contamination in the face of lawsuits filed by Connecticut and other states.

The bankruptcy deal attempts to resurrect a maneuver already declared illegal by the United States Supreme Court after Connecticut and other states objected to immunity for the Sackler family through the Purdue Pharma bankruptcy.

“Whether you are a family of billionaires or a multinational corporation worth billions of dollars, you cannot hide from liability behind someone else’s bankruptcy. We fought this in the Purdue bankruptcy and this question went all the way up to the Supreme Court. This is settled law,” said Attorney General Tong. “PFAS chemicals are a toxic menace to human health and our environment, and the cost to remediate this public health and environmental catastrophe will be massive. We will not allow Carrier to abuse the bankruptcy process to evade liability.”

Connecticut sued both KFI and Carrier in January 2024, alleging the companies knowingly contaminated Connecticut natural resources and harmed public health through toxic PFAS chemicals. Kidde-Fenwal is a former manufacturer of the “National Foam” brand of PFAS-containing aqueous film-forming foam (AFFF) once commonly used in firefighting. Connecticut banned the use of AFFF in most circumstances in 2021 due to severe adverse human health effects, including increased cancer risks, birth defects, and endocrine disorders, among other concerns. Today, nearly all humans have PFAS in their blood. PFAS chemicals are toxic and can persist in the environment indefinitely. PFAS chemicals can travel through the environment, including into drinking water sources, and accumulate in human blood. Even modest releases of PFAS can cause widespread pollution and damage.

Connecticut’s lawsuit is pending in federal court in South Carolina, along with lawsuits from numerous other states, public water providers, and personal injury claimants. KFI and Carrier are estimated to be liable for billions of dollars in environmental damages from PFAS contamination. KFI filed for Chapter 11 bankruptcy in May 2023.

The proposed bankruptcy plan would have Carrier pay creditors a total of $540 million over five years. Any recovery on KFI’s insurance policies after litigation would be split between Carrier and its creditors, up to $3.5 billion, after which all remaining recovery would go to creditors. In return, KFI would grant its parent company, Carrier, a release which seeks to eliminate all PFAS-related claims against Carrier. The plan was negotiated between KFI, Carrier, and attorneys for private plaintiffs, who would receive 8 percent of the proceeds of the bankruptcy plan in exchange for their support.

In letter, Senate and House Committee members slam Collins’ untruthful narrative around his chaotic contract cancellations

“…[C]ancelling hundreds of contracts in a several-day period and then scrambling to restore dozens just a few days later is not an indication of good program management. It’s an indication of waste and incompetence.”

[WASHINGTON, D.C.] – Senate Veterans’ Affairs Committee Ranking Member Richard Blumenthal (D-CT), Committee member U.S. Senator Angus King (I-ME), and House Veterans’ Affairs Committee Ranking Member Mark Takano (D-CA) today led a group of their colleagues to demand Department of Veterans Affairs (VA) Secretary Doug Collins immediately provide Congress the complete and updated list of VA contracts cancelled or proposed for cancellation, and blast his untruthful narrative around the contracts’ cancellation.

“Since February, our Committees have made more than a dozen requests, many of them bipartisan, for you to provide Congress with the complete lists of Department of Veterans Affairs (VA) contracts you have cancelled or proposed be cancelled. Today, we write to once again demand these lists,” wrote the lawmakers in a letter to VA Secretary Collins. “In addition, we are requesting a briefing from VA officials on the process by which contracts were and continue to be identified and cancelled, any meaningful advance consultation with career VA officials whose programs are impacted by these cancellations, and all activities of the VA-designated Department of Government Efficiency (DOGE) personnel or liaisons and other DOGE personnel involved in VA programs, operations, and management. Our requests for information on DOGE operations at VA began on February 12, 2025, and to date have received no substantive response.”

The lawmakers emphasized the total lack of transparency around Collins’ chaotic contract cancellation, which he bragged about on social media, stating it would save VA two billion dollars: “On February 24 and 25, 2025, you publicly celebrated on social media your plan, carried out with Elon Musk and DOGE, to cancel hundreds of VA contracts you claimed were for “PowerPoint slides and meeting minutes” and you indicated were valued at $2 billion. After you had given the orders for career officials in the Department to start the cancellations, a list of more than 870 contracts was leaked to Congress and the media…When the true purpose and impact of your mass contract cancellations were exposed, you and your leadership team directed career officials to pause some cancellations, stating in an internal email “VA Leadership is reconsidering previous guidance,” and “further contract reviews will be conducted to arrive at a new final decision.” Records show some contracts previously cancelled at your direction were then reversed while others remain cancelled.”

The lawmakers slammed Collins for his attempt to “hide the truth from Congress” regarding the contracts the Department cancelled: “If this was in fact a consultative and deliberate process, why did the Department have to reverse your orders of just a few days prior to blindly terminate hundreds of contracts?…Now, more than two months later, Congress is still waiting for accurate and complete information on the contracts you have cancelled, the contracts you have restored after being cancelled, the process the Department is using, and documentation for the savings generated and reinvested. When asked about receiving this information and a briefing on DOGE’s operations at the Department, your leadership stated simply that VA “will not be providing a briefing on the issue.”

The lawmakers also highlighted an incomplete, inaccurate list of more than 445 contracts VA claims to have cancelled, which the Department provided Congress on May 16^th. They pointed to the multiple inaccuracies of the data the Trump VA provided, including how at least 80 of the contracts listed were terminated during the previous Administration, “wildly inaccurate value/savings figures” for numerous contracts, and how a number of contracts on the list do not appear in the official Federal government system of record—the Federal Procurement Data System—as being cancelled. The lawmakers noted all of these issues call into question the accuracy of the data provided to Congress, and point to Collins’ chaotic process to identify and cancel contracts.

The letter was led by U.S. Senators Richard Blumenthal (D-CT), Angus King (I-ME), and U.S. Representative Mark Takano (D-CA), and was joined by Committee members and U.S. Senators Patty Murray (D-WA), Bernard Sanders (I-VT), Mazie Hirono (D-HI), Ruben Gallego (D-AZ), and U.S. Representatives Julie Brownley (D-CA), Morgan McGarvey (D-KY), Sheila Cherfilus-McCormick (D-FL), Delia Ramirez (D-IL), Nikki Budzinski (D-IL), Herbert C. Conaway, Jr. (D-NJ), and Maxine Dexter (D-OR).

The full text of the Senators’ letter is available here and below.

Dear Secretary Collins,

            Since February, our Committees have made more than a dozen requests, many of them bipartisan, for you to provide Congress with the complete lists of Department of Veterans Affairs (VA) contracts you have cancelled or proposed be cancelled. Today, we write to once again demand these lists. In addition, we are requesting a briefing from VA officials on the process by which contracts were and continue to be identified and cancelled, any meaningful advance consultation with career VA officials whose programs are impacted by these cancellations, and all activities of the VA-designated Department of Government Efficiency (DOGE) personnel or liaisons and other DOGE personnel involved in VA programs, operations, and management. Our requests for information on DOGE operations at VA began on February 12, 2025, and to date have received no substantive response.

On February 24 and 25, 2025, you publicly celebrated on social media your plan, carried out with Elon Musk and DOGE, to cancel hundreds of VA contracts you claimed were for “PowerPoint slides and meeting minutes” and you indicated were valued at $2 billion. After you had given the orders for career officials in the Department to start the cancellations, a list of more than 870 contracts was leaked to Congress and the media. In reality, these contracts were predominantly for direct services for veterans or supporting VA operations including: suicide prevention and mental health treatment; radiology services; outreach regarding burial benefits and health care services; cancer care; the PACT Act; disability claims processing and audits; and ensuring safe and clean facilities. Amazingly, while claiming the purpose of cancelling these contracts was to improve efficiency and reduce waste, you also directed the cancellation of more than a dozen contracts whose purpose was to assist VA in conducting oversight activities to identify and prevent waste, fraud, and abuse and follow the recommendations of the Government Accountability Office (GAO) and the VA Office of Inspector General.

      When the true purpose and impact of your mass contract cancellations were exposed, you and your leadership team directed career officials to pause some cancellations, stating in an internal email “VA Leadership is reconsidering previous guidance,” and “further contract reviews will be conducted to arrive at a new final decision.” Records show some contracts previously cancelled at your direction were then reversed while others remain cancelled. On March 3, 2025, you announced that instead of more than 870 contracts, you would cancel 585 contracts with an alleged value of $1.8 billion. This announcement provided no detail or information to support that claim while also stating VA would redirect about $900 million toward health care, benefits, and services for VA beneficiaries – again without evidence.

Also, on March 3, 2025, the Department indicated the 585 contracts would be cancelled “over the next few days” and that “the termination of these contracts will not negatively affect Veteran care, benefits or services, and will help VA better focus on its core mission: providing the best possible care and services to Veterans, their families, caregivers and survivors.” In your response to Senator King’s letter requesting information on these contracts, you refused to take accountability for your chaotic contract cancellation process and subsequent damage control. Your letter describes “a deliberative, multi-level review that involved the career subject-matter expert” but then admits the feedback from these experts was disregarded until after the fact when “VA rapidly reversed and restored contracted services in response to feedback from resident expert specialties, to include radiation safety, Veteran suicide prevention, and all other critical VA mission areas to avoid any clinically significant effect on patient care.” If this was in fact a consultative and deliberate process, why did the Department have to reverse your orders of just a few days prior to blindly terminate hundreds of contracts?

      Now, more than two months later, Congress is still waiting for accurate and complete information on the contracts you have cancelled, the contracts you have restored after being cancelled, the process the Department is using, and documentation for the savings generated and reinvested. When asked about receiving this information and a briefing on DOGE’s operations at the Department, your leadership stated simply that VA “will not be providing a briefing on the issue.” Additionally, even though many of these contracts were officially cancelled more than two months ago, your staff has indicated “VA cannot release any contract lists as this is all ‘pre-decisional’ until the Contracting Officer officially notifies and signs the termination letter and negotiates potential settlement costs.” This statement is another attempt to hide the truth from Congress and runs counter to logic given that many companies and public databases list hundreds of VA contracts as already cancelled.

Further, on May 16, 2025, your staff provided Congress with a list of more than 445 contracts which it indicated were “terminated and closed contracts” and then went on to say “there are additional contracts in negotiation to be closed, and this list does not include contracts modified to change scope. The frequently mentioned list of over 800 contracts was not released by VA as finale (sic) and complete; it was an initial review followed by several additional reviews.” Our initial review of these statements and the information provided indicates a number of contradictions and inaccuracies, and raises numerous additional concerns and questions.

First, the statements from VA staff attempt to once-again mischaracterize the sequence of events associated with your multi-month effort to withhold information about your disorganized contract cancellation effort. The public record is clear: you directed the cancellation of hundreds of contracts impacting services for veterans and only reversed yourself when the nature of those contracts were publicly disclosed. Second, the list of 447 contracts includes at least 80 that were terminated during the Biden Administration. Third, according to the documentation you provided, the list of canceled contracts totals $120.8 billion dollars in contracting value and claimed savings. Given VA’s entire budget for Fiscal Year 2025 is approximately $426.3 billion, the value of these contracts would represent 28 percent of the Department’s budget. This questionable number is compounded by numerous contracts with wildly inaccurate value/savings figures. For example, one contract labeled “VA Program Management Support Services Contract” is shown with an astronomical value of $44.8 billion. However, federal data shows the value of this contract at approximately $85 million – meaning the Department has misstated the value by $44 billion. Finally, a number of the contracts provided do not appear on the list of cancelled contracts in the official Federal government system of record – the Federal Procurement Data System (FPDS). All of these points call into question the accuracy of the data in the document you provided to Congress.

      We firmly support VA efforts to regularly review services procured by the Department. And that process should be built into any functioning acquisition and program management operation at VA. However, cancelling hundreds of contracts in a several-day period and then scrambling to restore dozens just a few days later is not an indication of good program management. It’s an indication of waste and incompetence.

So that we may conduct our independent and constitutionally authorized oversight of the Department, we ask again for a copy of the list of more than 870 contracts cancelled or proposed for cancellation you discussed in your social media posting and video on February 24 and 25, 2025, which you indicated had a value of $2 billion; a copy of the list of 585 cancelled contracts VA announced publicly on March 3, 2025, with an estimated value of $1.8 billion; and a list of all contracts cancelled by VA from January 20, 2025, to present. Further, we request a briefing to the Committees to explain the timeline and process by which these contracts were selected and ordered cancelled; how the material provided to Congress on May 16, 2025, was assembled; and on DOGE operations inside VA related to contracts and more generally. Thank you for your attention to this matter.