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BP shareholders look to restart lawsuit ‘Derivative’ action was brought after the Deepwater Horizon disaster; case has been frozen in Alaska court for several months Wesley Loy For Petroleum News
Lawyers for some BP shareholders are trying to revive a stalled lawsuit filed in an Alaska court in the wake of the Deepwater Horizon disaster.
The case is a “shareholder derivative” action, which the shareholders filed on behalf of the company against current and former BP board members and executives.
The shareholders allege breach of fiduciary duties, negligence and gross mismanagement in connection with the Deepwater Horizon blowout in the Gulf of Mexico, pipeline leaks and other problems in BP’s North Slope operations, and the deadly explosion at BP’s Texas City refinery in 2005.
The lawsuit in Alaska Superior Court in Anchorage has been essentially dormant since Aug. 15, 2011, when Judge Sharon Gleason stayed the case pending resolution of a similar suit in federal court in Houston, Texas.
The Texas case has since been dismissed, and now the question has arisen as to the fate of the Alaska suit.
Dismissal urged A hearing was held April 25 in Anchorage before Superior Court Judge Brian Clark, who now presides over the derivative case because Gleason has moved on to a position on the federal bench.
Richard C. Pepperman II, a New York City lawyer representing the BP board members and executives, argued the case should be tossed, in light of the dismissal of the Texas case.
U.S. District Judge Keith P. Ellison, presiding over the Texas case, ruled on Sept. 15, 2011, that England, where BP is headquartered, is “the far more appropriate forum” for the derivative suit.
Now that the Texas derivative suit has been dismissed, the derivative suit in Alaska’s Superior Court likewise “should be dismissed in its entirety,” Pepperman argued at the hearing.
Benny C. Goodman III, a San Diego lawyer representing the BP shareholders, saw it differently.
Alaska law applies? The people Goodman is representing include Jeffrey Pickett, whom Goodman described as an Anchorage resident and BP shareholder long involved in trying to encourage good corporate practices and governance within the company.
Goodman listed a few environmental and safety mishaps in Alaska oil fields that preceded the Deepwater Horizon disaster, and said the company’s “ongoing problems” hurt not only BP and its shareholders but also the state.
Yes, the Texas case was dismissed, but that doesn’t mean the Alaska case should also be dismissed, Goodman said. He urged the judge to lift the stay and let the case proceed.
While the other side argues England is the proper place for a shareholder derivative suit on behalf of BP, Goodman cited Alaska statutes to argue the London-based company is subject to the same liabilities as a domestic corporation.
“We have a compelling argument here, your honor, that Alaska law applies,” Goodman said.
Among the defendants named in the Alaska suit are Tony Hayward, BP’s former chief executive, and John Mingé, president of BP Exploration (Alaska) Inc.
Judge Clark posed a number of questions to the lawyers during the hearing, which lasted about an hour and 20 minutes.
“I will take the matter under advisement,” he said, adding his decision probably won’t come for at least three weeks.
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