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BP shareholders hit management board with lawsuit

Text by News Wires

Latest update : 2010-05-25

Adding to mounting pressure from the US public and the Obama administration, BP was slapped with a lawsuit from its own shareholders Monday. The plaintiffs claim that the company's safety negligence has already exposed it to $40 billion in losses.

REUTERS - Shareholders have sued the board of BP Plc for failing to monitor safety and exposing the company to potentially enormous liability related to the Deepwater spill disaster in the Gulf of Mexico, according to court documents.

A month ago a rig exploded in the Gulf of Mexico, killing 11 workers and sending heavy oil into fragile marshlands on the fringes of the Mississippi Delta.

On Saturday, U.S. President Barack Obama blamed the massive Gulf of Mexico oil spill on “a breakdown of responsibility” at BP.

“The Deepwater disaster will cause financial consequences to BP and the BP subsidiaries, which will be tabulated in the billions of dollars, including liability for damage to property, commercial interests and wildlife,” said the complaint.

The complaint said the disaster has wiped about $40 billion from BP’s market value.

The lawsuit was brought on behalf of shareholders by individual investor Robert Freedman and the Southeastern Pennsylvania Transportation Authority, or SEPTA, which runs Philadelphia’s regional public transit and owns BP’s American Depository Shares.

The plaintiffs are seeking damages as well as seeking to direct the board to take steps to improve corporate governance, such as limiting the number of inside directors and setting up an environmental exposure oversight committee.

A BP spokesman said the company does not comment on active litigation.

BP shares fell 2.7 percent in London trading to end at 493 pence.

The case is Southeastern Pennsylvania Transportation Authority and Robert Freedman v Anthony B Hayward et al, Court of Chancery for the state of Delaware, No. 5511.

Date created : 2010-05-25

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