Shareholder Sues BP Board Over Deepwater Horizon Oil Spill

BP PLC’s Board of Directors has been hit with a <"">shareholder derivative lawsuit over the Deepwater Horizon oil spill. The lawsuit was filed by a BP stockholder in federal court in New Orleans.

The Deepwater Horizon oil spill is the result of a catastrophic explosion that occurred aboard the offshore rig on April 20. Eleven crew members were killed in the blast. So far, BP has had no luck staunching the leaking well, which is gushing at least 200,000 gallons of crude into the Gulf of Mexico every day.

The every-growing spill is threatening both the ecology and the economy of the Gulf Coast. According to the Associated Press, at least 3.5 million gallons of crude oil have poured into the Gulf since the April blast. If it continues unabated, the spill will surpass the 1989 Exxon Valdez disaster next month.

The BP shareholder lawsuit claims the oil company ignored safety on Deepwater Horizon in its pursuit of profits. It also alleges that BP 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.

The complaint points out that Deepwater Horizon had been the site of numerous spills and accidents even before the April 20 disaster. In addition, the U.S. Coast Guard had cited the rig for being an “acknowledged pollution source” 18 times in the past 11 years.

Under the Oil Pollution Act of 1990, BP’s liability is capped at $75 million. However, legislation is moving through Congress that would raise the liability cap to $10 billion and make the change retroactive to the Deepwater Horizon catastrophe. BP is also liable for damages under the Louisiana Oil Spill and Prevention Response Act up to $350 million in damages. Most analysts expect BP’s liability will run into tens of billions of dollars

In addition to the BP Board of Directors, the shareholder lawsuit also names TransOcean Ltd., Halliburton Energy Services Inc., and Cameron International Corp. as defendants. BP PLC leased the Deepwater Horizon rig from TransOcean Ltd. The blowout equipment which failed on the rig was provided by Cameron International Corp, a subsidiary of TransOcean. Halliburton Energy Services Inc. provided drilling services on Deepwater Horizon that may have contributed to the blast.

According to the lawsuit, these defendants are liable to BP for their own negligence and misconduct in causing the disaster.

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