Shareholders have filed suit against BP p.l.c. for breaches of fiduciary duty and other corporate violations by BP’s board of directors arising from the Deepwater Horizon explosion and resultant Gulf of Mexico disaster.
The April 20, 2010 explosion on the Deepwater Horizon rig–and resultant enormous oil spill in the Gulf of Mexico–is only the latest in a series of catastrophic failures arising from BP’s energy business in the United States. It has recently been reported BP was warned the rig failed a key pressure test hours before it exploded. But, as has always been the case with BP, its board put profit before safety, refused to shut down the Deepwater Horizon when it learned of the problems, and now eleven workers are dead and the consequences to BP and the United States are catastrophic.
Shareholders have filed a derivative action on behalf of BP p.l.c. against the entire BP board of directors and several of its present or former officers and directors for intentional, reckless and negligent breaches of their fiduciary duties of care and candor.
The April 20, 2010 explosion of the Deepwater Horizon oil rig, located 52 miles southeast of Venice, Louisiana, will result in billions of dollars in losses to BP. The rig burned for 48 hours. Eleven crewmembers were killed in the blast. On April 22, 2010, after the fire was extinguished, the Deepwater Horizon rig sank to the bottom of the Gulf of Mexico. BP initially said around 1,000 barrels of oil per day were leaking from the wellsite. But on April 29, 2010, BP would admit the disaster was far worse, with as much as 5,000 barrels of oil per day gushing out of the wellsite. By this time, the oil slick had reached the Mississippi Delta.
On May 1, 2010, with undeniable satellite and photo evidence showing a much larger spill and environmental disaster, the wellsite leakage estimates were ratcheted up to an astounding 25,000 barrels per day. And as reported in a May 4, 2010 New York Times article, in a closed-door briefing session before Congress, a BP executive “conceded” the ruptured oil well could conceivably leak as much as 60,000 barrels of oil per day into the Gulf, 10 times the estimates of the current flow.
BP has conservatively estimated the spill is costing BP $6 million per day in cleanup and remediation. This large figure grossly underestimates the total outlays BP will need to make for this disaster, which will cost BP many billions of dollars–a disaster that could have been avoided had BP employed several rudimentary safety devices to help it stem the flow of oil.
This is only the beginning. Congress is mobilizing to change the cap on offshore oil rig damages from $75 million to $10 billion, and would ensure the Deepwater Horizon accident is included in the legislation, to ensure BP is “on the hook” for all the costs.
Shareholders allege BP has wasted corporate assets, subjected BP to untold billions in liability, and the board breached its fiduciary duties.
If you are a BP shareholder and wish to speak with us about your legal rights or are interested in participating in litigation concerning the BP and Gulf of Mexico disaster, please complete the following form or call us at 1-877-573-0007.