On September 4, federal judge Carl Barbier declared BP (NYSE:BP) was "Grossly Negligent" in the 2010 Gulf oil spill that killed 11 people and destroyed the environment. He referred to BP's conduct as "reckless" and assigned 67% of the fines to BP directly with the remaining 33% dividend up among other "negligent" parties. Under the Clean Water Act, the fines for this ruling will likely be quite substantial of up to $18 billion just for this piece alone. BP had previously only set aside $3.5 billion for fines.
I anticipated BP losing in court as it has a long history now of losing, especially when appearing before Judge Barbier. In my previous article BP's Mega-Billions In Oil Spill Payouts And Accounting Charges Are Back On I warned that BP was artificially (though legally most likely) inflating its earnings because it failed to account properly for upcoming BP settlement amounts and fines in the billions after it used up virtually all of the trust it set aside to pay them.
Meanwhile, payouts continue to pour out of BP and over to victims all summer long while new cases are being filed every day from victims. You can track the daily statistics from the court-appointed administrator on this website here. Expect to see some large charges for the third quarter and continuing from there. In addition, BP has done a lot of publicity attempting to gain sympathy for its legal woes and guilt victims out of filing their deserved claims. I believe this finding of "Grossly Negligent" won't help BP's sympathy efforts.
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