New York City Sues BP for Pension Losses Over 2010 Gulf Oil Spill

April 28, 2013

New York City said on Friday it sued BP Plc for more than $39 million of losses it claims beneficiaries of the city’s pension funds sustained due to BP’s “misconduct and fraudulent behavior” linked to the 2010 Deepwater Horizon oil spill.

“BP failed to disclose to shareowners the serious risks involved in its offshore drilling operation,” Comptroller John Liu said. “After the spill began, it misleadingly attempted to minimize the extent of the damage and the cost to shareowners.”

The lawsuit, filed in the Southern District of New York, alleges BP failed to disclose facts about the dangers involved in offshore drilling operations, the extent of the leak and the estimated cost of the cleanup costs.

BP declined to comment on New York’s lawsuit.

“The estimated transactional investment losses to City pension beneficiaries caused by BP’s misconduct and fraudulent behavior exceed $39 million,” the Comptroller’s office said in the news release.

BP’s New York-traded stock was down 0.1 percent at $42.2 after the news, about in line with the overall market. The broad based S&P 500 was down 0.2 percent.

The 2010 disaster in the Gulf of Mexico killed 11 rig workers and spilled 4 million barrels of oil in the worst offshore spill in U.S. history.

BP has estimated it could spend more than $42 billion to cover clean-up, fines and other liabilities. It has been selling a variety of assets to help cover its costs.

A trial for direct damages related to the spill got underway in February. The trial is being held with no jury before Judge Carl Barbier at federal court in New Orleans.

A U.S. civil trial has already been set for August 2014, regarding accusations that BP committed fraud by misleading shareholders before and after the 2010 Gulf of Mexico oil spill about its ability to respond to the accident.

Scheindlin limited that defense in a 2009 ruling, saying that ratings on notes sold to select investors were not “matters of public concern” deserving broad free speech protection.

The government has not hit Moody’s and Fitch with lawsuits similar to the case it is pursuing against S&P.

The cases are Abu Dhabi Commercial Bank et al v. Morgan Stanley & Co. et al, U.S. District Court, Southern District of New York, No. 08-07508; and King County, Washington et al v. IKB Deutsche Industriebank AG et al in the same court, No. 09-08387.

Was this article valuable?

Here are more articles you may enjoy.