BP Workers Can Sue Over Retirement
Losses Tied to Spill
By Laurel Brubaker Calkins and Margaret Cronin
Fisk Jul 15, 2014 7:13 PM ET
BP Plc (BP/) employees
can sue managers of the company’s retirement savings plan over
losses related to the 2010 Gulf of Mexico oil spill, a U.S. appeals
The New Orleans-based appellate court, citing a
recent Supreme Court ruling, today rejected U.S. District Judge
Keith Ellison’s 2012 decision denying claims for millions of dollars
in losses suffered by the plans.
The suits questioned plan managers’
investment in BP’s shares, which dropped more than 40 percent after
the worst offshore spill in U.S. history and still haven’t
completely recovered in value.
The plan managers “knew or should have known, based
on a variety of sources, that BP shares were not a prudent
investment,” the workers alleged in their complaints.
Citing then-prevailing legal precedent, Ellison, of
Houston, dismissed the claims because retirement-plan managers who
invest in company stock were entitled to a “presumption of prudence”
shielding them from litigation.
Last month, the Supreme Court unanimously ruled in an
unrelated case that company managers aren’t entitled to that
presumption when dealing with savings plans covered by the Employee
Retirement Income Security Act.
“ERISA fiduciaries managing a plan invested in
company stock are subject to the same duty of prudence as any other
ERISA fiduciary,” the three-judge appeals panel said today, citing
the high court order.
The panel sent the workers’ suits back to Ellison for
reconsideration in light of the new standard.
“BP does not believe the plaintiffs satisfy these new
standards and intends to renew its motion to dismiss in the district
court,” Geoff Morrell, a spokesman for London-based BP, said in a
Tom Ajamie, a lawyer for the workers, didn’t
immediately return telephone or e-mail requests for comment on the
The case is In Re: BP P.L.C. Securities, 12-20670, U.S. Court of
Appeals for the Fifth Circuit (New Orleans).
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Laurel Brubaker Calkins in Houston at email@example.com
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