BP Seeks Dismissal of Pension-Fund Claims Over Oil Spill
BP Plc (BP/) asked a judge to throw out investor claims that management downplayed safety risks before and after its Macondo oil well blew out in the Gulf of Mexico last year, causing billions of dollars in stock market losses.
The company also asked U.S. District Judge Keith P. Ellison to restrict any surviving investor fraud claims to owners of BP American depositary receipts, which trade on the New York Stock Exchange. BP said U.S. securities laws don’t apply to holders of foreign shares, such as the company’s common stock, which trades in London, where the company is based.
The investors “seek to transform a matter involving allegedly negligent safety processes into an action for securities fraud,’’ BP said in its filing. Citing previous court rulings, BP said, “securities laws do not protect investors against negligence.’’
Shareholders led by the pension funds of New York and Ohio are claiming billions of dollars in losses and seek recovery from BP and its directors and officers. Lawsuits over personal and economic injuries from the spill are combined in New Orleans federal court and aren’t affected by today’s request.
BP ADRs plunged 40 percent to $36.52 by June 1, 2010, from $60.48 on April 20, 2010, the day the well blew, triggering the worst offshore oil spill in U.S. history.
The investors said BP violated U.S. securities laws by misleading them before and after the spill. BP publicly touted a commitment to safety while cutting budgets and personnel and rejecting internal complaints, according to the investors’ lawsuit. BP also initially hid the true size of the blowout to limit the impact on its stock price, the investors claim.
Richard Mithoff, who represents individual investors in the BP securities litigation, said BP’s motion to dismiss was “customary in these kinds of cases.”
“I am confident we will meet these arguments and BP’s motion will be over-ruled,” Mithoff said in a phone interview today.
Dan Tierney, spokesman for Ohio Attorney General Mike DeWine, declined to comment on BP’s dismissal motion, citing a policy not to discuss ongoing litigation. Olayinka Fadahunsi, a spokesman for New York Comptroller Thomas DiNapoli, didn’t immediately return a call seeking comment.
More than 4.1 million barrels of crude spewed into the Gulf after the explosion, fouling hundreds of miles of shoreline and temporarily closing much of the region’s fisheries.
BP has established a $20 billion fund to pay claims of people and businesses harmed by the spill. The company said in court papers last month that it had incurred costs of $17.7 billion so far and took a pretax charge in 2010 of $40.9 billion in relation to the spill.
To contact the reporters on this story: Margaret Cronin Fisk in Southfield, Michigan, at email@example.com; Laurel Brubaker Calkins in Houston at firstname.lastname@example.org.