The children are squabbling among each other. BP sent a 272 billion dollar bill to Andarko for their 25 percent stake in the well. They also sent one to Masui. They have not paid. Andarko claims the spill was caused by BY cutting corners and it is their problem. They neglected safety to speed production and the explosion was caused by BPs greed and need for speed over safety.
Howzat? Estimated direct costs for the blowout and spill so far are approx. $3 billion. Sure you didn’t mean to say million?
OOPs Yep it was million. Those numbers are big enough to become abstractions.
The reason that BP, as well as other parties involved, should not declare or distribute dividends at this point is straight forward. Legally, it is financially irresponsible and it would most likley subject them to additional litigation in the future. When a company is in involved in pending litigation, often the court will order that their assets are freezed. This is necessary to protect claimants. Perhaps it would make more sense to you if you compare this situation to one where an individual transfers his or her assets to a family member to defraud a creditor attempting to collect. That is a fraudulent transfer. It isn’t exactly the same, from a legal perspective, but the logic still applies. When BP has been labled as the responsible party and damages are known to be of such an enormous amount and expected to grow in number, it would be financially irresponsible, if not fraudulent, for BP to distribute its earnings. BP knows it will be directly liable for all clean up costs plus a minimum of $75 million in other types of damages (not considering that BP waived the right to be limited to 75 million). With that knowledge, the board members and the executives of BP must be financially responsible in order to avoid adding additional liabilities for acting without reasonable business judgment. I don’t know if that makes sense, but it isn’t at all out of the ordinary for BP to wait before distributing dividends to its shareholders. It would only decrease the value of its stock and open up the door for corporate governance actions.