BP Sued Over Losses in Employee Pension Plan After Gulf Spill
BP Plc was sued by members of its employee savings plan over losses tied to the company’s plunging stock price amid the oil leak disaster in the Gulf of Mexico.
BP has lost more than half of its market value since the April 20 explosion that caused the largest oil spill in U.S. history. The fire and blast aboard the Deepwater Horizon drilling rig that was working on a well for London-based BP killed 11 members of its crew.
The lawsuit, for which the workers are seeking class- action, or group, status was filed yesterday in federal court in Chicago.
“Defendants knew or should have known that investment in BP Plc equity was -- and continues to be -- an imprudent investment of the ESP’s assets due to serious mismanagement and improper business practices that resulted in catastrophic incidents of international significance, including, among others, the BP spill in the Gulf of Mexico,” the plaintiffs claimed.
Full-time, part-time, occasional and temporary employees are eligible to invest in the employee savings plan, or ESP, according to the lawsuit. Regulatory filings show that the plan held $2.45 billion worth of BP American depositary shares, or 29 percent its $8.27 billion of assets, at the end of 2009, according to the complaint.
The lawsuit also names State Street Corp., trustee of the plan, as a defendant.
Jon Pack, a BP spokesman, declined to comment. Arlene Roberts, a State Street spokeswoman, didn’t immediately reply to a message seeking comment.
BP should have known that investing in the company’s stock was an “imprudent investment” because the company has a history of safety problems, including the 2005 explosion at a refinery in Texas City, plaintiffs said in the lawsuit.
The defendants breached their fiduciary duties because they didn’t sell the BP stock, hire an independent adviser to review the plan or stop investing in BP stock, according to the lawsuit.
Attorneys in the lawsuit representing the plaintiffs include W. Mark Lanier and those at the firm Milberg LLP.
London-based BP said yesterday that the cost of battling the Gulf of Mexico oil spill has reached $2.65 billion.
The case is Moule v. BP Corp. North America, 10-cv-03990, U.S. District Court, Northern District of Illinois (Chicago).