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Court revives BP retirement plan lawsuit filed after oil spill

  • The 5th U.S. Circuit Court of Appeals in New Orleans today revived a lawsuit in which participants in BP employee retirement savings plans alleged they were deceived into buying and holding BP stock before and after the 2010 Gulf of Mexico oil spill.
  • The participants say the value of a BP stock fund where their money was invested fell by $1.85B in the months after the Deepwater Horizon rig exploded; they say BP misled them as investors, and as early as 2007 overstated the safety controls the company had in place.
  • The lawsuit had been tossed in 2012, finding that plan fiduciaries enjoyed a legal presumption that they acted prudently, but the U.S. Supreme Court did away with the presumption last month in a different case.
Comments (30)
  • charliezap
    , contributor
    Comments (1267) | Send Message
     
    """ . . participants in BP employee retirement savings plans alleged they were deceived into buying and holding BP stock before and after the 2010 Gulf of Mexico oil spill."""

     

    What nonsense! Lawyers attempting to take another chunk out of BP! I hope they fall on their aasssseess!
    15 Jul, 07:14 PM Reply Like
  • Sittingcrow
    , contributor
    Comments (107) | Send Message
     
    Yes, and let's go stand in line and say we owned a shrimp boat, and how our lives were turned upside down by BP. Louisiana has been waiting 200 years, and here it is- a windfall to solve all their misery, all their sadness, even if it's all totally false -and dishonest.
    15 Jul, 07:23 PM Reply Like
  • anarchist
    , contributor
    Comments (1330) | Send Message
     
    Or true!
    15 Jul, 07:26 PM Reply Like
  • Sittingcrow
    , contributor
    Comments (107) | Send Message
     
    Here's what's true:
    1. The chemical spray the government insisted be layered all over the Gulf spill was as bad, if not worse, than the spill itself, in its lasting effects.

     

    2. The Emerald Coast, aka the Redneck Riviera, was so thoroughly cleaned by BP that the beach municipalities were amazed, were dazzled by BPs sincerity, and literally had to "make them leave".

     

    3. The Texas Gulf Coast beaches, i.e. Galveston, have always been extremely nasty from rig leakage totally unchecked -US OIL COMPANIES.

     

    4. Are there obvious reasons the judges are ruling this way ?
    ANYONE ?
    16 Jul, 12:05 PM Reply Like
  • BAHAMAS1
    , contributor
    Comments (2040) | Send Message
     
    This is not nonsense its pure thievery !

     

    The corrupt conspiritor here is louisiana and the corrupted are the false claimants applying late to get their free $$ from BP.

     

    This continual extortion of BP only stops on election days in Nov 2014 and 2016.
    15 Jul, 07:30 PM Reply Like
  • curious-george
    , contributor
    Comments (169) | Send Message
     
    How I pray you are correct;the highly knowingly biased judges have allowed the lies...
    My the good lord bless all the good employees at BP for bring USA oil for our economy, and may the stockholders that held and are not back to even or better being paid dividends waiting be blessed with profits well earned!
    15 Jul, 09:06 PM Reply Like
  • morrism1
    , contributor
    Comments (16) | Send Message
     
    I lost $200k in BP stock options; am I less deserving of comepensation than a Louisiana restaurant owner?
    15 Jul, 07:37 PM Reply Like
  • wyostocks
    , contributor
    Comments (7873) | Send Message
     
    Please explain how you "lost" $200k in stock options.
    Do you mean that you didn't get the appreciation you hoped for, or actually "lost" $200k in real money.
    Either way, do you seriously think you are the only employee of a company that didn't reap what you thought you might on the day the option was granted?

     

    Welcome to the real world.
    15 Jul, 07:52 PM Reply Like
  • HarryDavidson
    , contributor
    Comments (26) | Send Message
     
    If you look at it that way and can justify it, I lost a ton on JP Morgan options some years ago but didn't feel too bad. My dad lost over a mil when Sears dropped back in the 70's, options and ESPP. Many years of faithful service and wound up holding squat. The way of the markets, diversify,don't put all your eggs in one basket. We learn the hard way.
    15 Jul, 10:41 PM Reply Like
  • neal weintraub
    , contributor
    Comments (2) | Send Message
     
    That is why it is called a "stock market."
    Want a sure thing?
    Well, try your home?
    OOPs.
    How about asking your kids for money?
    That does not work.
    I thought a diversified portfolio was the answer.
    I lost money in BP too.
    But I did not bail. As for options. You gotta be kidding. Options have no place in investing.
    15 Jul, 11:48 PM Reply Like
  • wyostocks
    , contributor
    Comments (7873) | Send Message
     
    Just proof to other countries that America is no longer the country you want to do business in. Better to try Zimbabwe.
    15 Jul, 07:49 PM Reply Like
  • curious-george
    , contributor
    Comments (169) | Send Message
     
    not Z but there are many other better countries currently
    might this change? perhaps a revolution has a higher probability
    15 Jul, 09:09 PM Reply Like
  • HarryDavidson
    , contributor
    Comments (26) | Send Message
     
    You try Zimbabwe if you feel it is justified and let us know how you did.
    15 Jul, 10:33 PM Reply Like
  • Paul L.
    , contributor
    Comments (19) | Send Message
     
    The longer the negative press and lawsuits continue...the longer it will take the stock price to achieve full value....which gives me more time to increase my position and consume a juicy dividend along the way. :)
    15 Jul, 07:58 PM Reply Like
  • deercreekvols
    , contributor
    Comments (5440) | Send Message
     
    Judge Barbier strikes again!

     

    BP would be better off focusing on other parts of the world to do business in. Operations in 80 countries. 79 of them appreciate the business BP brings to the table.

     

    Long BP and continuing to buy.
    15 Jul, 08:17 PM Reply Like
  • wyostocks
    , contributor
    Comments (7873) | Send Message
     
    Hey Deercreeks,

     

    Long time no hear from you. I also have backed away from SA lately.

     

    Hope the summer is going well.
    15 Jul, 10:11 PM Reply Like
  • JB204zz
    , contributor
    Comments (62) | Send Message
     
    Why couldn't these lawyers be the ones who initially defended BP against all the frivolous claims?
    15 Jul, 08:32 PM Reply Like
  • curious-george
    , contributor
    Comments (169) | Send Message
     
    BP is mostly one client; the plaintiffs are thousands...what are the odds of some of those thousands becoming your clients in the future v one BP
    15 Jul, 09:11 PM Reply Like
  • JB204zz
    , contributor
    Comments (62) | Send Message
     
    Actually, I was being facetious and making a comment on these specific attorneys in the case for the employees stock plans. Let me "splain",...these attorneys were smart enough to put together a case as esoteric as the employee savings program while the original attorneys who defended and guided BP opened up the spigot for outrageous claims. It's a case of BP not hiring the smartest attorneys for the hundreds of millions they spent.

     

    Hey, I see another potential lawsuit.......
    16 Jul, 12:16 AM Reply Like
  • watermark302
    , contributor
    Comments (194) | Send Message
     
    <<<"deceived into buying and holding BP stock before and after the 2010 Gulf of Mexico oil spill.">>>
    I bought and am holding after the 2010 spill. I was not deceived, but am I eligible to join this lawsuit?
    15 Jul, 08:59 PM Reply Like
  • curious-george
    , contributor
    Comments (169) | Send Message
     
    BP is likely to continue to fight into the next decade and the payout will diminish as time passes...along with inflation effects...and judges retire, die off, new ones may well favor BP...and so the world turns
    all the very best to BP employees and stockholders
    15 Jul, 09:13 PM Reply Like
  • nap.jerry
    , contributor
    Comments (55) | Send Message
     
    I am cotinually amazed how frivilous claims can be entertained in the US justice system. Of course BP probably told them to kep their stock; what else could they say?
    15 Jul, 09:26 PM Reply Like
  • lawyersarescum
    , contributor
    Comments (7) | Send Message
     
    The US legal system seems to be ensuring that in any future oils spillage the company involved (ignoring Haliburton, Transocean who sensibly ran for the hills) will not stay around to clear up the spill and compensate anything that moved for fictitious claims. Instead they will walk away.
    16 Jul, 03:28 AM Reply Like
  • A Newell
    , contributor
    Comments (486) | Send Message
     
    The sound and fury, signifying nothing.
    16 Jul, 11:37 AM Reply Like
  • glf4mny
    , contributor
    Comments (241) | Send Message
     
    Sitting Crow:
    4. Are there obvious reasons the judges are ruling this way ?
    ANYONE ?
    Yes, but first you have to understand The Moench Presumption which was the core issue in Moench v. Robertson, in a nutshell, that fiduciaries of plans that required or encouraged investment in employer stock (created under ERISA) were entitled to a presumption that they acted prudently under ERISA. This presumption could only be overcome by a showing that plan fiduciaries abused their discretion by continuing to invest in (or retain) employer stock. See here:
    http://bit.ly/1qg8Sl3
    Then on June 25, 2014, the Supreme Court issued a decision in
    Fifth Third Bancorp vs Dudenhoeffer which changed the case law. See here:
    http://bit.ly/1qg8Sl5

     

    Further, and to all the other SA readers who posted in opposition of the revived lawsuit, Whitley, et al, v. BP Plc, et al, 5th U.S. Circuit Court of Appeals, No. 12-20670, see here: http://1.usa.gov/1qg8V0b. Keep in mind this particular case involves ONLY BP employees that participated in the "BP retirement savings plan". That plan has fiduciary oversight by a Plan Administrator, State Street, and officers and directors within BP. Also, BP pays Fidelity to establish individual accounts for its employees who want to contribute to a 401(k) and serve as a broker/dealer through which the financial transactions occur. There are no charges for employee trading but certain limitations apply. The Plan, allows employees to invest (contribute a percentage of earnings via employer payroll deduction bi-weekly) in a wide array of financial products, i.e. any stock listed on domestic exchanges, any mutual funds (equity, bond, REITs ) and cash (actually a cash fund of Fidelity), etc. One unique aspect though, the purchase of BP stock is within a special fund, the BP Stock Fund.
    On the day of the Macondo mishap, BP was capitalized to the tune of $190B. Each day after the event, BP stood by and watched in horror the massive sell off of its stock. Stockholders of all types were selling, including the big boys, the institutional investors. When it stopped, capitalization stood at $90B. BP was aware of the holdings in the stock fund, and possibly to the extent it could to mitigate the decapping, I heard that trading was suspended for ~30 days. Though I'm not a proponent of litigation, but if that did occur, it's easier to understand why the employees filed a lawsuit in the first place and I say, give them there day in court.
    16 Jul, 03:55 PM Reply Like
  • charliezap
    , contributor
    Comments (1267) | Send Message
     
    glf, you mention " . . fiduciaries of plans that required or encouraged investment in employer stock . . ". When I worked for a major oil company, which had a savings plan, we were never "required", or even "encouraged" to invest in company stock. The plan had several options, including company stock, a long list of mutual funds, and fixed income funds. There was matching by the company, to the extent of 60%, or 100%, depending on the length of employment. But the matching applied equally, no matter what option was chosen. The main point is that investment in company stock was voluntary, and the fiduciaries had no direct involvement in the choice. My guess would be that the BP plan was drawn up on similar lines.

     

    Incidently, the Macondo blowout occurred on May 20th, 2010. There was no suspension of trading in BP stock in 2010, or anytime since.
    16 Jul, 04:42 PM Reply Like
  • Foghornjoe
    , contributor
    Comment (1) | Send Message
     
    Check your facts. When did the 'Macondo blowout' occur?
    17 Jul, 08:51 AM Reply Like
  • Sittingcrow
    , contributor
    Comments (107) | Send Message
     
    Thank you, glf. It turns out buyers should have been stepping up, not sellers. The time to buy is when there's oil in the water, er, or, blood in the streets.
    17 Jul, 09:06 PM Reply Like
  • glf4mny
    , contributor
    Comments (241) | Send Message
     
    Charlie: I should have stated it a little differently to be more clear.....I heard that employee trading in and out of the BP Stock Fund (a specially created fund for employees only) was suspended for 30 days after the incident. Employees sat helplessly and watched the stock price fall from the $60s to the $20s. The suspension did not apply to any other holdings outside of that particular private fund.
    If your company would have imposed such a trading restriction on you after a decapping event, what would you do?
    16 Jul, 10:29 PM Reply Like
  • charliezap
    , contributor
    Comments (1267) | Send Message
     
    Sorry, I did not realize the suspension you referred to applied to employees and the BP stock fund.
    17 Jul, 08:10 AM Reply Like
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