| | |  Business News 
BP Investor Sues Directors for Lapses Over Gulf of Mexico Spill
 Laurel Brubaker Calkins - Bloomberg
go to original
May 10, 2010
A BP Plc investor has sued the company’s board of directors on claims its pursuit of profits at the expense of safety led to the Gulf of Mexico oil spill that could cost the company billions of dollars.
The lawsuit claims Chief Executive Officer Tony Hayward and other directors who sit on internal environmental and ethics panels failed to improve safety practices as promised by a settlement in an earlier shareholder lawsuit over a fatal explosion at BP’s Texas City refinery and oil leaks at company pipelines in Alaska.
“Even after a 2006 shareholder derivative proceeding brought as a last resort to require BP to address safety concerns was voluntarily settled out of court, these defendants continued to ignore and disregard safety issues concerning the company’s deepwater operations,” Lewis Kahn, of Kahn, Swick & Foti LLP, said in papers filed May 7 in New Orleans federal court.
The directors made “purely cosmetic changes at the corporate level while ignoring the substance of the safety violations and the threat they posed to the entirety of the Gulf, commercial and private property, and the company’s own survival as a going concern,” Kahn said in the filing on behalf of Katherine Firpo, a shareholder since 2007.
BP spokesmen Daren Beaudo and Scott Dean didn’t immediately return emails Sunday night seeking comment on the lawsuit. Previously, BP has declined to comment on pending litigation.
‘Pursuit of Profits’
BP directors “elected to cut costs, including safety and maintenance expenditures, in pursuit of profitable results to report to Wall Street,” Kahn said.
He claimed the defendants also lobbied state and federal agencies “to remove or decrease the extent of safety and maintenance regulation of the company’s Gulf operations, claiming, against all evidence, that ‘voluntary compliance’ would suffice to address safety and environmental concerns.”
London-based BP faces nearly 100 civil lawsuits, most of which are proposed class actions over environmental and economic damages suffered by commercial fishermen, shrimpers, seafood processors, property owners and tourism-related businesses harmed by the spill.
More than 5,000 barrels of oil a day have been leaking from a damaged subsea well 40 miles off the Louisiana coast, following last month’s explosion and sinking of the Deepwater Horizon, which was under hire to BP.
The rig was owned by Transocean Ltd. and used blowout prevention equipment and drilling services provided by Cameron International Corp. and Halliburton Energy Services Inc., respectively. These companies and their insurers are also defendants in the shareholder action.
The lawsuit seeks unspecified monetary damages from BP’s directors. It also asks that shareholders appoint three new directors and that BP create an independent board of outside directors to monitor the company’s environmental and litigation exposure.
The case is Firpo v. Hayward et al, 2:10-cv-01430, U.S. District Court, Eastern District of Louisiana (New Orleans).
To contact the reporter on this story: Laurel Brubaker Calkins in Houston at laurel(at)calkins.us.com. To contact the editor responsible for this story: David Rovella in New York at drovella(at)bloomberg.net.
|
|
| |
Vallarta Weddings
Tell a Friend
Site Map
Print this Page
Email Us