Haynes Boone attorneys Greg Van Houten, Andrew Van Osselaer and Deborah Slattery-Pereira authored an article for Industry Today explaining that manufacturing and industrial companies with PFAS exposure would be well served to evaluate whether a divestiture represents the optimal resolution of their legacy obligations.
Read an excerpt below.
A transactional mechanism now exists for manufacturing and industrial companies to permanently resolve PFAS-related liabilities. Through a structured liability divestiture, a company transfers its PFAS obligations (including prospective obligations) to a specialized liability management firm that assumes full responsibility for the defense, settlement, and remediation of those claims.1 The result is a clean separation: the divesting company is then free to allocate capital and management attention to its core operations, unburdened by legacy environmental and products liability risk.
Municipal Intermediate, Inc., a trusted supplier of critical safety equipment, executed the first publicly reported PFAS liability divestiture in January 2026.2 Many liability divestures had closed previously, but they had involved asbestos, talc, and environmental liabilities.3 Municipal’s divestiture, however, marks the first in the PFAS space. The emergence of this market represents a potentially transformative development for an industry grappling with one of the most significant and rapidly evolving categories of contingent liability in modern corporate history.
To appreciate why liability divestitures have attracted such intense interest, one must first understand the magnitude of the problem they are designed to solve. PFAS have been used across a vast array of industrial applications since the 1940s, from non-stick coatings and waterproofing treatments to firefighting foams and semiconductor manufacturing.4 Often referred to as “forever chemicals” due to their extraordinary resistance to environmental degradation, PFAS are now the subject of a tidal wave of litigation that threatens to rival the asbestos crisis in scope and cost.5 As scientific understanding of their health and environmental effects has deepened, and as regulatory frameworks have tightened, companies with any historical (or current) connection to PFAS find themselves exposed on multiple fronts.6 And companies are exposed regardless of whether they have already been sued; if they have not t been, they will be, just as many smaller users of asbestos were sued in the 2000s and 2010s despite not being targeted in the 1980s and 1990s alongside asbestos manufacturers.7
The liability landscape for PFAS is bifurcated but equally perilous on both sides. Companies that incorporated PFAS into their products face products liability claims from consumers, downstream users, and governmental entities.8 Companies that used or disposed of PFAS as part of their manufacturing processes face environmental claims under federal and state statutes, including the Comprehensive Environmental Response, Compensation, and Liability Act and analogous state superfund laws, as well as tort claims from neighboring communities and water utilities.9 In either case, the financial exposure is staggering, the litigation is protracted, and the reputational damage can be severe. The examples that follow illustrate just how devastating these liabilities can be, and why the prospect of permanent liability divestiture has become so compelling.
Read the full article on Industry Today here.
