Emphasis on output, rather than safety, blamed for decline in value in wake of Gulf of Mexico oil spill
Joining the queue of plaintiffs suing BP and other companies involved in the Deepwater Horizon explosion in the Gulf of Mexico is the pension fund for city employees, which has taken issue with the loss of value of BP's stock.The lawsuit, filed recently in federal court in New Orleans, contends that BP and its executives caused the value of the company's stock to slide by more than 40 percent through their "long-implemented choice to maximize output at the company's production facilities instead of ensuring that the company complied with safety regulations."
"The BP defendants have a long history of ignoring crucial safety issues, including but not limited to safety issues related to the operation of offshore submersible rigs such as the Deepwater Horizon oil rig, including problems with the crucial blowout preventer device that so spectacularly failed during this disaster," the lawsuit claims. It also cites earlier accidents, including a 2005 explosion at BP's Texas City refinery that left 15 workers dead.
"We've alleged that certain actions on behalf of the directors and officers of BP have caused significant damage to the BP brand and its stock value as a result of this oil spill," said Derriel McCorvey, a Lafayette attorney representing the pension fund. Also representing the pension fund is the New York law firm of Wolf Haldenstein Adler Freeman & Herz.
The suit does not say how much BP stock was held by the pension fund, and McCorvey said he didn't immediately know.
The lawsuit by the $310 million New Orleans City Employees' Retirement System is expected to be consolidated with similar suits filed by other shareholders, he said. A similar suit was filed on May 10 in federal court in New Orleans by the $1.2 billion Louisiana Municipal Police Employees' Retirement System in Baton Rouge.
Michelle Krupa can be reached at mkrupa@timespicayune.com or 504.826.3312.