US - BP Plc's board was sued by Louisiana's pension fund for police officers over the Gulf of Mexico oil spill on behalf of shareholders and the company.
The fund claims Chief Executive Officer Tony Hayward and other directors who sit on internal environmental and oversight committees prioritized production and profits while encouraging lax safety practices that led to the spill. The complaint was filed in federal court in New Orleans by the Louisiana Municipal Police Employees' Retirement System.
"This derivative lawsuit arises from the disastrous consequences of defendants' choice to maximize output at the company's production facilities instead of ensuring that the company complied with safety regulations," said the police fund's lawyers, who are affiliated with Bernstein Litowitz Berger & Grossmann LLP in New York.
The lawsuit repeats allegations from an earlier shareholder derivative suit filed by a Pennsylvania investor on May 7 against BP's board. Both complaints allege directors 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.
"Tony Hayward acknowledged that the BP board and executives were on notice that the company was operating in a hazardous manner and safety improvements were drastically needed" when he took office in 2007, the investors' lawyers said in the Louisiana complaint.
‘Effective Safety Initiatives'
"Since then, the BP board and the company's executives have failed to adequately implement and monitor any effective safety initiatives on behalf of BP," the lawyers claimed.
BP's costs associated solely with cleanup and containment of the massive spill "could reach $10 billion," the lawyers claim. They said efforts to contain the spill and cap the damaged well are accruing at more than US$6m daily.
London-based BP faces about 100 civil lawsuits, most of which are proposed class actions over environmental and economic damages suffered by thousands of commercial fishermen, shrimpers, seafood processors, property owners and tourism- related businesses harmed by the spill.
More than 4 million gallons of oil have leaked from a damaged subsea well 40 miles off the Louisiana coast, since last month's explosion and sinking of the Deepwater Horizon, which was leased by BP.
The rig was owned by Transocean Ltd. and used blowout prevention equipment and drilling services provided by Cameron International Corp. and Halliburton Energy Services Inc., respectively. These companies and their insurers are also defendants in the shareholder action.
The Louisiana police fund seeks unspecified monetary damages from the BP directors and asks the company to implement corporate-governance improvements that will boost safety and environmental compliance.
Darren Beaudo, a BP spokesman, declined to comment on the litigation.
"We continue to cooperate with ongoing investigations into the Deepwater Horizon drilling rig incident as well as assist in efforts to identify the factors that may have lead up to the disaster," Cathy Mann, a Halliburton spokeswoman, said in an e- mailed statement. "Due to the pending investigations and litigation, it is inappropriate to comment further at this time."
Guy Cantwell, Transocean's spokesman, had no immediate comment, saying he would forward the request to a crisis management official in the company.
Previously, the companies involved in the spill have declined to comment on pending litigation. The case is Louisiana Municipal Police Employees' Retirement System, Derivatively on Behalf of BP Plc v. Hayward, 2:10-cv-01439, U.S. District Court, Eastern District of Louisiana (New Orleans).
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