What: Shares of chemical maker Chemours (NYSE:CC) were up 13.3% at 3 p.m. EDT on Friday after a new jury award was less than investors feared.
So what: Earlier this week, a jury awarded a man $5.1 million in compensatory damages after he developed cancer by drinking water polluted with a chemical that Chemour's former parent DuPont (NYSE:DD) used to make Teflon. However, that same jury only ordered DuPont to pay $500,000 in punitive damages to that man, which was a fraction of the $1.2 billion in punitive damages that lawyers argued DuPont should pay. This smaller award is good news for Chemours because it agreed to bear the costs of these verdicts when it was spun off from DuPoint last year.
Both Chemours and DuPont will appeal the decision, and it could be years before the outcome is final. Further, Chemours believes it has defenses against its former parent's claims, which could shift the punitive damage burden away from the company.
Now what: The companies still have hundreds of similar cases left to litigate, and according to one analyst, Chemours could face $1.2 billion to $1.9 billion in future liabilities. However, this one award seems to indicate that it will not be on the hook for an exorbitant sum of punitive damages, which is certainly a positive for its investors.