Business Ownership and Wealth Management

Dana Barfield

Subscribe to Dana Barfield: eMailAlertsEmail Alerts
Get Dana Barfield: homepageHomepage mobileMobile rssRSS facebookFacebook twitterTwitter linkedinLinkedIn


Article

Expect Liability Issues to Increase

Timeline of the 2010 Gulf oil spill legal cases

Timeline of the 2010 Gulf oil spill legal cases:

— April 20, 2010: An explosion and fire on the BP-operated drilling rig Deepwater Horizon kills 11 workers. Thousands of gallons of oil begin gushing into the Gulf of Mexico from the blown-out well.

— June 16, 2010: BP agrees to put $20 billion into an escrow fund to settle economic injury claims by fishermen and various Gulf industries.

— December 15, 2010: The Justice Department files suit against BP and eight other companies over the accident, asking they be held liable for removal costs and damages caused by the explosion and spill.

— January 12, 2011: The 380-page report from government-appointed National Oil Spill Commission finds that time- and money-saving decisions created an unreasonable amount of risk that triggered the Deepwater Horizon explosion.

— March 2, 2012: A few days before the trial was to begin, BP and lawyers for the plaintiffs in a trial over the 2010 oil spill reach a settlement. Tens of thousands of people waiting for money from a fund being managed by Ken Feinberg, the Gulf Coast Claims Facility, can take what the settlement offers them or opt out and make a claim directly to a BP-run entity. They can sue if they don't like what they get from that fund.

— November 15, 2012: BP agrees to pay $4.5 billion in a settlement with the U.S. government over the massive 2010 oil spill and to plead guilty to felony counts related to the deaths of 11 workers and lying to Congress. The figure includes nearly $1.3 billion in criminal fines — the largest such penalty ever — along with payments to several government entities. Two BP well site leaders are charged with manslaughter, and a former executive is charged with lying to authorities.

Reasons to go hmmm…

- There is no record of any allegations BP executives lied to Congress until November 15, 2012 when the settlement was announced.  Only then did Congressman Markey’s website allege lying.

- A government appointed commission found “unreasonable risk” but did not find negligence, criminal conduct, nor intent.  Moreover, National Oil Spill Commission cited poor performance by the government as a significant contributing factor in the spill and cleanup.

- Nevertheless, BP settled by pleading guilty to felony counts and paying criminal fines.

- Executives and employees have been charged with criminal offenses such as manslaughter.

Moral of the Story:

Expect liability exposures to go up, especially relating to “out of favor” industries or environmental issues.

If you own real property of any kind, and especially if you operate a business on it, your risks are increasing.

It is critical to structure your business operation to shield assets, cash, and profits from operations and operational liabilities.  We can help you here.

Timeline adapted from http://www.huffingtonpost.com/2012/11/15/gulf-oil-spill-timeline_n_2139515.html

More Stories By Dana Barfield

Dana is the president of The Barfield Group, which has provided industry leading Financial Advice, Investment Services, and helped people Plan for Retirement for more than 20 years. He is a frequent speaker and writer for a variety of industry, regional, and national publications on business ownership and wealth building related topics.