BP in­vestor law­suit to be led by New York, Ohio pen­sion funds

The Pak Banker - - Company& -

NEW YORK: The New York and Ohio state pen­sion funds will be the lead plain­tiffs in share­holder lit­i­ga­tion against BP Plc and com­pany di­rec­tors and man­agers over in­vest­ment losses suf­fered in the wake of the Gulf oil spill.

U.S. District Judge Keith P. El­li­son in Hous­ton named New York State Comptroller Thomas DiNapoli and Ohio State At­tor­ney Gen­eral Richard Cor­dray, who head their states' pub­lic em­ployee pen­sion funds, as lead plain­tiffs for in­vestors who bought ei­ther BP com­mon stock or Amer­i­can de­posi­tary re­ceipts from June 2005 to June 2010.

El­li­son also named four in­di­vid­ual in­vestors as lead plain­tiffs for a smaller class of in­vestors who bought com­mon shares of London-based BP or ADRs from March 2009 to April 20 of this year, the date the Deep­wa­ter Hori­zon rig ex­ploded, spark­ing the worst off­shore oil spill in U.S. his­tory.

While the sub-class of in­vestors claim that BP's lead­er­ship made mis­lead­ing state­ments about drilling safety in the Gulf of Mex­ico in the months be­fore the rig ex­plo­sion, the state pen­sion funds "ar­gue more gen­er­ally that BP made fraud­u­lent state­ments be­tween 2005 and 2010 about its safety pre­cau­tions in the Gulf of Mex­ico and else­where,'' El­li­son said in yes­ter­day's or­der.

The New York and Ohio funds also claim sub­stan­tial losses from BP ADRs pur­chased sev­eral weeks af­ter the Deep­wa­ter Hori­zon ex­plo­sion, a time­frame not cov­ered by the com­plaint of the smaller group of in­vestors, El­li­son said. For six weeks af­ter the blast, the funds claim "BP in­ten­tion­ally un­der­stated the oil flow rate in an at­tempt'' to di­min­ish harm to the com­pany, lawyers for one of the in­sti­tu­tional funds said in court pa­pers.

BP fell about 40 per­cent in the weeks af­ter the Deep­wa­ter Hori­zon drilling rig ex­ploded while drilling a BP well off the Louisiana coast on April 20, in­vestors said in an Oct. 13 court fil­ing. The drop elim­i­nated bil­lions of dol­lars in the com­pany's to­tal mar­ket cap­i­tal­iza­tion, share­hold­ers' lawyers claimed.

BP ADRs, which each equal 6 or­di­nary shares, closed yes­ter­day at $44.11, up from a low of $27.02 on June 25.

El­li­son named Co­hen Mil­stein Sell­ers & Toll PLLC of New York, Berman DeVa­le­rio of Bos­ton, and Yet­ter Cole­man LLP of Hous­ton as co-lead coun­sel for the larger in­vestor se­cu­ri­ties fraud class.

The judge named Cotch­ett, Pitre & McCarthy of Burlingame, Cal­i­for­nia, and the Mithoff Law Firm of Hous­ton as co-lead coun­sel for the smaller sub-class of in­vestors who bought shortly be­fore the spill.

Ohio At­tor­ney Gen­eral Cor­dray, who was de­feated in Novem­ber, will be re­placed by Mike DeWine, who takes of­fice in Jan­uary.

Se­cu­ri­ties fraud ac­tions by BP share­hold­ers are one of three cat­e­gories of BP in­vestor claims that have been con­sol­i­dated for joint pre­trial han­dling in El­li­son's court.

El­li­son also pre­sides over law­suits filed by BP em­ploy­ees claim­ing losses from mis­man­age­ment of their com­pany pen­sion funds, as well as law­suits brought by in­vestors who are su­ing BP's board and man­age­ment on be­half of the com­pany.

Share­hold­ers in all three cat­e­gories filed suits in mul­ti­ple states be­fore the fed­eral panel on mul­tidis­trict lit­i­ga­tion trans­ferred the cases to El­li­son in Au­gust. So-called MDL pro­ceed­ings are de­signed to save time and money, and to pre­vent con­flict­ing rul­ings by dif­fer­ent judges pre­sid­ing over sim­i­lar cases. -Bloomberg

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