, The News JournalĀ 1:49 p.m. EDT June 11, 2015

A group alleging DuPont failed to meet its environmental obligations has threatened action with the Securities and Exchange Commission over the Chemours spin off.

The organization, Keep Your Promises DuPont, said Tuesday it will submit information to the regulatory agency claiming Chemours has not adequately disclosed its potential environmental liabilities. A group representative said it will ask the SEC to invalidate Chemours’ Form 10, a filing necessary before a company can trade securities on a U.S. exchange.

If the SEC invalidates Chemours’ Form 10, it could create regulatory issues for the impending spin-off.

“Total liability could be in the multiple billions,” said Robert Masciola, identified as an advisor to Keep Your Promises. “Chemours is taking on the majority of DuPont’s environmental liability with only 25 percent of its revenue. If adverse outcomes are realized in mediation and litigation… it would very likely be a devastating outcome for investors.”

DuPont will spin off Chemours as a separate company on July 1. Chemours, currently operating as DuPont’s performance chemicals unit, will assume some of DuPont’s environmental liability.

Chemours will undertake the environmental liability and remediation costs for 90 sites throughout the country, according to Keep Your Promises. The organization has also alleged that Chemours has downplayed its potential responsibility for these costs in regulatory filings and investor information.

“DuPont is trying to pass its dirty business off to a subsidiary and letting the chips fall where they may,” said Bill Wolfe, founder of New Jersey Public Employees for Environmental Responsibility, on behalf of Keep Your Promises. “The investor information woefully understates the extent of potential liabilities.”

Dan Turner, a DuPont spokesman, denied the group’s claims.

“DuPont and Chemours remain committed to continuing to fulfill all of their environmental and legal obligations in accordance with existing local, state and federal regulatory guidelines,” Turner said.

The SEC will be notified of the allegations by the end of the week, according to Douglas Land, chair of the Action Network Fund, a nonprofit organization that is helping fund Keep Your Promises.

Lawrence Hamermesh, a professor of corporate governance at Widener University School of Law, served as senior special counsel in the SEC’s Office of Chief Counsel of the Division of Corporation Finance. He said the agency rarely, if ever, blocks a Form 10.

“A Form 10 is not like a registration for an initial public offering,” he said. “There is not the same level of review. I would be surprised if the SEC took action.”

Inadequate disclosure claims are typically brought by investors who lost money when a stock price dropped because when a company’s regulatory filings are proven to be false. But those plaintiffs also have to meet a high bar to prove their case.

“Companies don’t put disclosures together on the fly,” Hamermesh added. “They try to pretty careful about them.”

Keep Your Promises was formed by West Virginia residents who allege DuPont has not fulfilled all of its obligations related to the clean up of toxic gas C-8 spill in that region.

The group has been very vocal in Delaware in recent months. Members protested outside the company’s corporate headquarters during its annual shareholder meeting, flew an airplane with a banner over DuPont’s campus during the meeting and purchased a billboard by the Wilmington train station.

DuPont used C-8 at its Washington Works plant in Washington, West Virginia. In 2009, DuPont agreed to pay $1.6 million in fines to satisfy the state’s claims against the company after C-8 was found in the Ohio River.

The company has met its obligations related to the C-8 contamination cleanup and no longer uses the gas, according to Turner. Liabilities related to the use of C-8 will be among those transferred to Chemours.

Contact Jeff Mordock at (302) 324-2786, on Twitter @JeffMordockTNJ or[email protected].