BP has gone crying to mummy over the big payouts it’s having to make because of the 2010 Deepwater Horizon disaster. It wants the U.K. government to ask the U.S. government to step in and give a hand.
BP says it’s being forced to make overly large payments to companies in the Gulf Coast region that claim to have lost business because of the spill, and it says those payments are jeopardizing BP’s own financial recovery and potentially putting the company at risk of a hostile takeover. The payments are being calculated by a court using a formula to which BP agreed.
But now BP has filed an appeal in court against that agreement, claiming that the compensation amounts are overinflated or, in some cases, entirely unnecessary. The company recently warned shareholders that the $8.2 billion it previously anticipated forking out in compensation was a significant underestimation.
BP is so worried by the potential magnitude of alleged undeserved payments it is making to companies that it is planning to ask the British prime minister and chancellor for help in persuading the US government to intervene. It is hopeful that David Cameron will raise the issue at the G8 meeting of the governments of the world’s richest countries, which the UK is hosting next month.
The court filing warns that BP will be “irreparably harmed” unless the compensation system is reformed fast. According to BP sources, the rate at which cash is leaking from the company could turn into a serious new financial crisis for the company, putting at risk its dividend and making it vulnerable to a takeover by another oil company. …
BP says that the way its settlement is being implemented by the Courts Administrator, with the support of the Louisiana district court, is “poised to become a black mark on the American justice system”
Meanwhile, BP is defending itself in a huge federal lawsuit in New Orleans against states and other victims of the oil spill. The judge overseeing the case must ultimately decide whether the accident was the result of BP’s negligence — or its “gross negligence.”
Too bad BP opted not to do anything about the “big risk” of explosion it identified back in 2009 …