# Indiana Federal Court Freezes DuPont Assets Over PFAS Liability Dodge
A federal judge in Indianapolis has blocked DuPont de Nemours Inc. and Corteva Agriscience from transferring or liquidating assets tied to a corporate restructuring scheme that critics say was designed to shield the chemical giant from mounting environmental liabilities. U.S. District Judge issued a temporary restraining order (TRO) that prevents asset movements to or from Vylor Inc., a newly created entity that received DuPont's commercial assets but left behind its per- and polyfluoroalkyl substances (PFAS) contamination obligations.
Guam and 15 U.S. states filed suit alleging constructive fraudulent transfer under state insolvency law. The plaintiffs challenge a spin-off structure they contend rendered DuPont insolvent by design, stripping it of valuable assets while preserving liabilities for groundwater and soil contamination linked to PFAS compounds used in industrial applications for decades.
DuPont's restructuring strategy mirrors a playbook deployed by other large industrial defendants facing environmental claims. The company transferred operating assets and revenue-generating business lines to Vylor while keeping PFAS-related remediation costs within the original DuPont entity. This approach theoretically left the legacy company without sufficient resources to satisfy settlement agreements or court judgments.
The plaintiffs' expert demonstrated that DuPont became insolvent immediately upon completing the Vylor transaction. This finding carries legal weight under fraudulent transfer doctrine, which permits creditors and state governments to unwind asset conveyances made without fair consideration when the transferor becomes insolvent or unable to pay its debts as they mature.
PFAS contamination has emerged as one of the costliest environmental liabilities facing American corporations. These "forever chemicals" persist in soil and groundwater indefinitely and have been detected in drinking water systems nationwide. State attorneys general have pursued recovery claims against manufacturers, including DuPont, 3M Company, and other industrial defendants. Litigation expenses and remediation costs have climbed into the billions of dollars.
The temporary restraining order serves as a preliminary injunction mechanism. It halts asset transfers pending a full hearing on the plaintiffs' motion for a preliminary injunction. If the court finds a likelihood of success on the merits, it can extend the freeze through final judgment. Courts applying fraudulent transfer law examine whether the transferor received reasonably equivalent value and whether it became insolvent or remained unable to pay obligations after the transaction.
DuPont faces similar PFAS claims in multiple jurisdictions. The company has settled some state claims while contesting others. The Vylor structure appears designed to compartmentalize liabilities and limit recovery exposure. However, fraudulent transfer law permits state attorneys general to challenge asset dispositions that impair the ability to satisfy environmental claims.
The Indiana court's action reflects growing judicial skepticism toward corporate restructurings that disconnect revenue-generating assets from environmental obligations. Judges have increasingly recognized that spin-offs targeting specific liabilities violate the fundamental principle that creditors retain claims against all assets available to satisfy debts incurred during the company's operations.
The case proceeds against a backdrop of escalating PFAS litigation. States view fraudulent transfer remedies as essential tools for recovering cleanup costs when manufacturers attempt to avoid liability through corporate engineering. The outcome will influence how other chemical manufacturers structure separation or bankruptcy proceedings involving environmental debt.