Shares of Anadarko Petroleum plummeted Friday after a judge ruled that the oil company owes litigants billions due to a fraudulent reorganization designed to avoid environmental liability.

US bankruptcy judge Allan Gropper ruled that the oil and gas company owes between $5.1 billion and $14.5 billion. The company immediately vowed to appeal the ruling.

Investors sold its shares off after the ruling; they closed at $78.30, down 6.4 percent.

The case stems from a series of corporate restructurings at Kerr McGee Corp. in the early 2000s prior to it being acquired by Anadarko in 2006 for $18 billion.

Kerr McGee, once a leading chemicals firm, is accused of leaving waste sites around the United States, contaminated with uranium contamination, thorium and other toxins that pollute land and water.

Gropper concluded that the restructuring constituted a "fraudulent conveyance" that offloaded more than $1 billion in environmental liabilities to another entity, Tronox Worldwide.

Gropper said Tronox, created in 2005, lacked the financial means to run as a viable business or to assume the liabilities. Tronox fell into bankruptcy reorganization in 2009 and emerged in 2011.

"There can be no dispute that Kerr-McGee acted to free substantially all its assets -- certainly its most valuable assets -- from 85 years of environmental and tort liabilities," Gropper said.

As a result, creditors of Kerr McGee would be "hindered or delayed" in trying to recoup money from Tronox to cover cleanup costs or other liabilities, Gropper wrote.

The reorganization, Gropper said, also made the "cleansed" Kerr McGee "more attractive as a target of an acquisition."

The decision followed a 34-day trial that plumbed the circumstances surrounding Kerr McGee's creation of Tronox.

Anadarko said Gropper's ruling is not a final judgment and that the court will consider Anadarko's right to reduce the penalty available under bankruptcy court.

The decision would be a big hit for Anadarko, which reported $2.5 billion in earnings in 2012 on revenues of $13.4 billion.

Anadarko was a partner of BP's in the 2010 Deepwater Horizon accident in the Gulf of Mexico. It paid BP $4 billion in 2011 to resolve claims related to the accident.

John Hueston, the litigation trustee for the Tronox Trust, hailed the decision and said it would enable "the remediation of the environmental hazards Kerr McGee wrongfully attempted to abandon."

The trust's beneficiaries include the US government, more than a dozen states and the Navajo Nation.

"The US will not let polluters evade their environmental liabilities through a corporate shell game," said Manhattan US Attorney Preet Bharara, who represented the US government.

Citi slashed Anadarko's investment rating to "neutral," saying an appeal could stretch out for up to 10 years and "create a substantial overhang on Anadarko's stock price."