Environmental liabilities can have long-lasting repercussions for companies, even those owned by billionaires like Jerry Jones. In the case of Comstock Resources, a small oilfield in Laurel, Mississippi became the center of a legal battle after it was sold to Petro Harvester Oil & Gas in 2010. The due diligence report commissioned by Petro Harvester revealed significant environmental concerns, including rusting equipment, leaking pipes, and unlined pits for toxic wastewater.
Despite these red flags, Petro Harvester proceeded with the acquisition of the assets for $75 million. Over the next decade, Comstock underwent significant transformations, with Jerry Jones acquiring a majority stake in the company. However, the long-standing environmental issues at the Laurel field have now come back to haunt Comstock, as a jury trial is set to begin in Jones County Circuit Court with the Baucum family suing for damages.
The Baucum family has claimed that oilfield toxins buried on the site have migrated beneath their property, leading to health issues like cancer. Witnesses have reported seeing unusual activity on the site, including buried drums and radioactive metals. The case has seen multiple twists and turns, with the Mississippi Supreme Court ruling in favor of the Baucums and sending the case back for trial.
The bankruptcy of Petro Harvester further complicates the situation, as environmental liabilities cannot be discharged through bankruptcy. This leaves Comstock and potentially other previous owners of the oilfield exposed to financial and legal repercussions. The Baucums’ case could set a precedent for future lawsuits against oil companies for environmental damages.
Despite the ongoing legal battle, Comstock has not disclosed this litigation to its public shareholders, claiming that third party contractors may be responsible for any pollution. Water pollution experts believe that significant remediation efforts will be needed in the area, which could cost millions of dollars. The case has also seen allegations of witness intimidation and attempts to prevent Jerry Jones from being mentioned at trial.
The outcome of the trial could have far-reaching implications for Comstock and other oil companies facing similar environmental liabilities. The Baucums, who have been at the forefront of this legal battle, believe that the case should have been settled years ago and are prepared to see it through to ensure accountability for the environmental damages caused by the oilfield.
