BP stockholders file Alaska suit against top company officials

May 20, 2010

BP shareholders filed suit against the company's CEO and board of directors in Anchorage Superior Court Thursday. (Mike Nederbrock/KTUU-DT)

by Lori Tipton
Friday, May 21, 2010

ANCHORAGE, Alaska -- As oil continues to gush from a leaking BP wellhead in the Gulf of Mexico, the company faces problems in Alaska as well.

On Thursday, BP shareholders filed a lawsuit in Anchorage against CEO Tony Hayward and all 17 members of BP's board of directors, alleging "gross mismanagement" of the oil giant. They claim that the defendants' actions have tarnished the company's reputation and put the company's future in jeopardy.

In the 57-page Superior Court suit, shareholders accuse top BP executives of not taking necessary steps to ensure that the company was compliant with safety rules and environmental safeguards. The lawsuit seeks unspecified damages, as well as the appointment of an "independent corporate monitor" to implement safety and environmental compliance measures.

The suit notes that the company has a long history of health, safety and environmental problems at its U.S. facilities, citing multiple incidents in Alaska, Texas, and most recently the Gulf of Mexico. It also claims BP did not attempt to plan any response to the explosion that sank its Deepwater Horizon oil rig off the Louisiana coast.

"BP only began grasping at solutions to fix the problem after the disaster happened," the shareholders allege in court documents. "As a result, BP's efforts at cleanup have been ineffective and costly; worse, some of their ‘solutions' are dangerous in their own right, or take too much time to implement while the spill grows exponentially larger."

The lawsuit also states that BP is spending about $6 million a day to plug the leaking wellhead and clean up oil that's leaked into the Gulf, but the estimated impact on BP is tens of billions of dollars.

Shareholders claim that negligence on part of the company's top executives has hurt BP's value.

"BP and its business, goodwill and reputation have been severely injured, if not irreparably damaged, by defendants' reckless disdain for, and disregard of, legal compliance, including with safety and environmental laws," the suit states.

The suit also mentions that in 2009, BP continued to lobby against stricter safety rules proposed by the U.S. Minerals Management Service. The rules BP fought would have required companies to identify potential hazards at all facilities and adopt written operating procedures.

Due to the situation in the Gulf, BP faces enormous damages, fines, penalties and settlements, as well as criminal prosecution -- which shareholders claim could cause the second-largest gasoline marketer in the U.S. to go under.

BP is not commenting on the pending litigation.

Contact Lori Tipton at ltipton@ktuu.com

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