[/caption]President Obama’s Secretary of the Interior, Ken Salazar, may want to keep his boots on BP’s neck. But BP has legal options which may provide it some refuge.
I am certain that BP has a legion of lawyers working on its' behalf, and somewhere along the way the discussion must have come up about how long can BP sustains its' liability beyond the $20 billion it agreed to place in escrow for all the potential victims of the spill.
With many experts voicing that the $20 billion is merely a drop in the bucket for what will be needed to compensate the citizens of the Gulf States, we must be mindful that there are legal remedies to be had for BP to seek refuge from liabilities.
We all remember how OJ Simpson was living large, even when the Goldmans had won civilly against him, right? This was because the laws in Florida, where OJ had his home, were exempted from the civil liability, preventing the Goldmans from attacking his home and NFL pension.
What if BP does something similar? Say, file for Bankruptcy to protect itself from the future liabilities that are projected it will sustain from the spill?
For BP to file Bankruptcy, it must be done in “good faith,” which means that there are objective reasons to do so. This good faith clause is mandated, acting as a deterrent and preventing bogus filings. Bankruptcy without this good faith criterion would result in the court denying the Bankruptcy petition.
We must be conscious of the fact that a solvent company like BP can take refuge under the United States Bankruptcy laws. If this happens, we all may cry foul, but know that it is a legal strategy at BP’s disposal. And remember that BP is also a British company and it might file under British laws.
If you think that this remedy for BP hasn’t crossed anyone’s mind, you would be mistaken.
House Judiciary Chairman, John Conyers, has introduced legislation to prevent BP from taking refuge in the British bankruptcy laws.
First, the UK’s courts might be more lenient to BP in light of the fact that it is one of its' own – and the fact there is riff between President Obama and 10 Downing Street - stemming from his stinging criticism of BP. This should give us cause that BP might just seek refuge under the UK’s laws.
The fact that the U.K. courts are not known to dole out the kind of civil monetary damages that our courts provide is another reason for BP to seek a legal remedy in the United Kingdom.
You might think the strategy laid out above might be fraught with danger for BP from a public relations’ point of view, but can the PR for BP get any worse? Knowing the mentality of a typical board and shareholder of a conglomerate like BP, which is in the business to maximize profits, it is prudent to think that Chapter 11 Bankruptcy might be in the near future for BP. Via Bloomberg.
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