BP Plc investors claiming as much as $2.5 billion in market losses caused by company misrepresentations about the severity of the 2010 oil spill will make their case to a jury next May 18, a judge ruled today.
The investors, led by the pension funds of New York and Ohio, claim the company inflated share prices by downplaying the size of the spill in the weeks after the blowout of BP’s Macondo well in the Gulf of Mexico. Only investors who held ADR shares in the U.S. are part of the lawsuit.
U.S. District Judge Keith Ellison in Houston first set the trial for October. He changed the date to avoid a conflict with a separate trial over as much as $18 billion in U.S. pollution fines BP faces in New Orleans federal court.
That trial, set to begin Jan. 20, is the third phase of a multiyear trial to determine BP’s liability for public and private damages from the worst offshore spill in U.S. history.
Ellison previously allowed investors who held BP U.S. shares from April 26, 2010, through May 28, 2010, to pursue their claims as a group. He rejected claims by investors who sought to sue the company over pre-blast statements. He told those investors today he won’t give them another chance to rework their complaint.
BP shares plunged by more than 40 percent in the weeks after the April 2010 Deepwater Horizon drilling disaster, as it became clear that the company couldn’t immediately contain the spill. More than 4 million barrels of oil escaped into the Gulf of Mexico during the 87 days London-based BP took to control the well.
BP said the shareholders remaining in the lawsuit might seek compensation in excess of $2.5 billion for spill-severity misrepresentations, according to a June 4 filing at the New Orleans Court of Appeals. BP has appealed Ellison’s order approving the post-spill class of investors’ bid to go to trial.
A BP spokesman, Geoff Morrell, didn’t immediately respond to requests for comment on today’s ruling. Richard Mithoff, an attorney for investors trying to sue for market losses pegged to BP safety improvement pledges before the spill, said his clients would review their options before deciding whether to appeal their dismissal.
The case is In Re BP Plc Securities Litigation, 4:10-md-2185, U.S. District Court, Southern District of Texas (Houston).